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GUIDE TO

STRATEGIC PLANNING A B O O M E R S T R AT E G I C A D VA N TA G E ™

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KEYS TO P R O F I TA B I L I T Y

“In order to maximize your profitability, you need a written plan detailing your firm’s strategy. Our one-page system reduces the time required, builds consensus, provides consistent communications, insures accountability and is easy to maintain.” L. Gary Boomer

THINKabout your future. PLAN your strategy. GROWexponentially.

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SUMMARY S

trategic planning is often talked about, but rarely completed in most professional service firms. This may be because strategic planning requires time for consensus building and often the planning documents go unread and are not adhered to; therefore, many professionals feel strategic planning is a waste of time. In the accounting profession, many firms are nothing more than several sole proprietors with multiple visions who are simply sharing overhead. Strategic planning is an important step toward the development of the one-firm concept. It will bring key people together in order to build something far greater than they can imagine individually. This Guide has been developed for firms who want to save time, ensure results, and hold themselves accountable in order to achieve their goals and objectives. Our approach is about progress, not perfection! This guide provides the tools for effective and efficient strategic planning:

Section of the guide

Comments

Executive Summary

You’re there—Let’s get started!

Documenting Your Firm’s Dangers, Opportunities and Strengths (D.O.S.)*

All progress starts with the truth! Identify your dangers, opportunities and strengths.

Growth: The 10X Growth Model* The No-Growth Model

Maybe you don’t want to grow to 10 times your current size, but be ready to learn some important lessons about what you and your firm should be doing, even at current growth rates. Also, learn the impact on owners from a no-growth model. This will motivate your partners to a growth strategy.

Developing Your Firm’s: Vision Statement Mission Statement Core Values

This can be time consuming if you have not already done it and do not have a process in place. If you have already done it, our process will quickly confirm and build stronger consensus among the stakeholders.

Sample Plans (Jones & Company, LLC)

Here you will find sample plans in our one-page format, ready for laminating, of a ficticious firm’s Strategic Plan, Technology Plan and Marketing Plan.

Measurement Tools and Concepts

Measuring is different from accounting. Learn the differences.

Execution

Without an urgent time line, procrastination is a powerful gravitational force and the tendency is to morph back to current habits. Overcome gravity through discipline and processes during execution.

Proven Tools (Forms): The Accountability Review* The 90 Day Game Plan

These tools will reduce management time and ensure that personnel are aligned with the firm’s plan. They also increase confidence and hold people accountable.

Sustaining the Commitment

Success breeds success. Get your entire team motivated, focused, and committed.

* TM & © 2005. Based on the D.O.S. ConversationTM, The 10X Mind ExpanderTM and The Positive FocusTM, concepts from The Strategic Coach ProgramTM. All rights reserved. Used with written permission. www.strategiccoach.com. page 1

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KEYS TO P R O F I TA B I L I T Y

Most professionals are trained to be critical rather than creative thinkers. Therefore, new and innovative ideas are often met with numerous obstacles. In this guide, you will learn: •

How other firms are profiting from strategic planning.

•

What it takes to: • Build consensus • Establish top priorities • Allocate resources to the strategic initiatives • And get personnel to hold themselves accountable with a reduced amount of time managing the process

The planning document (One-Page Laminated Game Plan) is designed to quickly communicate with clients, owners, staff and business partners. Too many professional service firms try to be all things with limited resources (personnel and capital). With a strategic plan, those same firms can maximize the return on their investment while developing an environment of success, learning and training, and work-life balance. This guide is organized for a quick read and allows you to enter data, information and assumptions about your firm and, in effect, quickly build consensus, document the firm’s vision statement, mission statement, core values and strategic initiatives. It is much easier to maintain than traditional 20-100 page planning documents. Once firms have completed their strategic plan, they can easily develop technology, staffing, marketing and training plans that integrate and are in alignment. While firms can complete the strategic planning process internally, most will benefit from an outside facilitator. Facilitators bring experience to the process without the internal political baggage. They also typically reduce the time commitment of the process from procrastination to days or a few weeks. Your first step should be to review the processes outlined in this guide and then schedule a facilitator and dates for a firm meeting (Firm Summit). The process is most successful in an inclusive rather than exclusive environment. Buy-in from all levels and departments within the firm reduce the time to execute. Our experience shows that spending more time in the planning process tends to significantly reduce the time spent in the execution phase. Involving people in the process requires their time and attention. While many often say they don’t care, they really do care and will be more committed to the outcome if they are involved from the beginning. In addition, we often hear from firm management that new people do not need to be involved, as they really don’t know how things work within the firm. I encourage you to include these people in one or more sessions for their buy-in, in addition to their opinions.

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D.O.S.

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Dangers, Opportunities & Strengths*

Documenting Your Firm’s Dangers, Opportunities and Strengths (D.O.S.)* Every organization has them. Since all progress starts with the truth, it is best to be brutally honest about where you are today and where you want to be in the future. A question we often ask in order to help the firm get the picture is: If we were meeting here three years from today, what has to happen personally and professionally for you to be satisfied with the progress? As you can see, this is not an easy question and requires thought, honesty and communicative skills. The D.O.S.* exercise will help the participants in the strategic planning process focus on the future. Most people try to focus on the present, and the problem is that the present does not last. The choice is to either focus on the future or the past. Progress does not come from focusing on the past. Yes, you can learn lessons from failures and successes of the past, but it will do you no good to focus on what has happened in the past. You must focus on the future if you plan to progress. Dangers are generally associated with fear and the loss of something such as money, health, clients and relationships. Strengths are associated with your firm and your relationships. Build on your strengths rather than focusing on your weaknesses. Opportunities are driven by clients and the market. Think about what your clients are telling you. Most opportunities are associated with relationships, creativity and leadership. Relationships provide confidence. Creativity creates new capabilities. Leadership provides direction. You will find that many opportunities may not be associated with your current core business of financial statements and tax returns. This is scary to most accountants because of their critical thinking. Give yourself the luxury of creative thinking during the strategic planning process. Avoid tactical thinking until you have developed consensus on the strategic initiatives. Complete the following form by simply listing all of your firm’s dangers as quickly as possible. After you have listed the dangers, list the reason(s) it is a danger. Then, as the final step in the exercise, list your top three dangers. This will require some thought, communication and consensus building.

Danger

Reason

1._______________________________________________________________________________________________________________________

1._______________________________________________________________________________________________________________________

2._______________________________________________________________________________________________________________________

2._______________________________________________________________________________________________________________________

3._______________________________________________________________________________________________________________________

3._______________________________________________________________________________________________________________________

4._______________________________________________________________________________________________________________________

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8._______________________________________________________________________________________________________________________

8._______________________________________________________________________________________________________________________

9._______________________________________________________________________________________________________________________

9._______________________________________________________________________________________________________________________

10.__________________________________________________________________________________________________________________

10.__________________________________________________________________________________________________________________

Top 3 Dangers

1._______________________________________________________________________________________________________________________

2._______________________________________________________________________________________________________________________

3._______________________________________________________________________________________________________________________

* TM & © 2005. Based on the D.O.S. ConversationTM, The 10X Mind ExpanderTM and The Positive FocusTM, concepts from The Strategic Coach ProgramTM. All rights reserved. Used with written permission. www.strategiccoach.com. page 3

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OPPORTUNITIES Complete the following form by simply listing all of your firm’s opportunities as quickly as possible. After you have listed the opportunities, list the reason(s) why you believe it is an opportunity. Then, as the final step in the exercise, list your top three opportunities. This will require some thought, communication and consensus building. Opportunity

Reason

1._______________________________________________________________________________________________________________________

1._______________________________________________________________________________________________________________________

2._______________________________________________________________________________________________________________________

2._______________________________________________________________________________________________________________________

3._______________________________________________________________________________________________________________________

3._______________________________________________________________________________________________________________________

4._______________________________________________________________________________________________________________________

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10.__________________________________________________________________________________________________________________

Top 3 Opportunities

1._______________________________________________________________________________________________________________________

2._______________________________________________________________________________________________________________________

3._______________________________________________________________________________________________________________________

STRENGTHS Complete the following form by simply listing all of your firm’s strengths as quickly as possible. After you have listed the strengths, list a reason(s) why you believe this strength is important. Then, as the final step in the exercise, list your top three strengths. This will require some thought, communication and consensus building. Strengths

Reason

1._______________________________________________________________________________________________________________________

1._______________________________________________________________________________________________________________________

2._______________________________________________________________________________________________________________________

2._______________________________________________________________________________________________________________________

3._______________________________________________________________________________________________________________________

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9._______________________________________________________________________________________________________________________

9._______________________________________________________________________________________________________________________

10.__________________________________________________________________________________________________________________

10.__________________________________________________________________________________________________________________

Top Strengths

1._______________________________________________________________________________________________________________________

2._______________________________________________________________________________________________________________________

3._______________________________________________________________________________________________________________________

Congratulations! You have just completed an important step in the strategic planning process. All progress starts with the truth! page 4

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GROWTH The 10X Growth Model* This exercise is for firms of all sizes and is most effective with all of the owners present. Simply propose that your firm is ten times its current size in annual revenues. The first reaction will be that one third of your owners will think this is a great idea. Another one third will say there is no way they want to be ten times larger and they will immediately give you valid reasons why your firm should not be ten times larger. Some of the common obstacles are:

I don’t want the big organization that ten times requires. I have no interest in being ten times larger. I don’t want to work any harder.

We don’t have the people necessary to grow ten times. What does ten times growth have to do with strategic planning?

It is not possible to grow ten times in this market. We are already working as hard as we can. I want ten times greater net income, not gross income. We don’t have the right clients to grow ten times.

A firm ten times larger will cause too much stress. We don’t have the capital required to be ten times larger. We work in a conservative industry. It is not possible. Our people don’t want to work for a large firm. I don’t need an income that is ten times larger.

While all of these may be stated sincerely, they simply demonstrate the critical thinking ability of most CPAs. Please be patient as we proceed with the exercise because you will learn some valuable lessons in the process. Complete columns #1– #3 in the following table.

Metric

Firm Revenue

#1 3 Years Ago

#2 Current Year

#3 10x Larger

#4 In 3 Years

▼

▼

▼

▼

$

$

$

$

$

$

$

$

Number of Full-time Equivalents Revenue per FTE Number of Offices Number of Owners * TM & © 2005. Based on the D.O.S. ConversationTM, The 10X Mind ExpanderTM and The Positive FocusTM, concepts from The Strategic Coach ProgramTM. All rights reserved. Used with written permission. www.strategiccoach.com. page 5

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A B O O M E R S T R AT E G I C A D VA N TA G E ™

Now that you have completed the firm metrics, please answer the following questions: If your firm were ten times larger, what would the firm have to do differently? 1._______________________________________________________________________________________________________________________________________________________________________________________________________

6._______________________________________________________________________________________________________________________________________________________________________________________________________

2._______________________________________________________________________________________________________________________________________________________________________________________________________

7._______________________________________________________________________________________________________________________________________________________________________________________________________

3._______________________________________________________________________________________________________________________________________________________________________________________________________

8._______________________________________________________________________________________________________________________________________________________________________________________________________

4._______________________________________________________________________________________________________________________________________________________________________________________________________

9._______________________________________________________________________________________________________________________________________________________________________________________________________

5._______________________________________________________________________________________________________________________________________________________________________________________________________

10.___________________________________________________________________________________________________________________________________________________________________________________________________

Now the tough question…if the firm were ten times larger, what would I have to do differently? 1._______________________________________________________________________________________________________________________________________________________________________________________________________

6._______________________________________________________________________________________________________________________________________________________________________________________________________

2._______________________________________________________________________________________________________________________________________________________________________________________________________

7._______________________________________________________________________________________________________________________________________________________________________________________________________

3._______________________________________________________________________________________________________________________________________________________________________________________________________

8._______________________________________________________________________________________________________________________________________________________________________________________________________

4._______________________________________________________________________________________________________________________________________________________________________________________________________

9._______________________________________________________________________________________________________________________________________________________________________________________________________

5._______________________________________________________________________________________________________________________________________________________________________________________________________

10.___________________________________________________________________________________________________________________________________________________________________________________________________

Reality, Based Upon Prior Growth Rate Now, let’s look at the firm’s growth trend over the past three years. Let’s project forward three years using that same growth rate rather than the ten times projection. Please complete column #4 in the prior table. With a revenue projection that is more comfortable to most firm owners, please review your lists of what your firm and you would have to do if your firm were ten times larger. Also, please eliminate the items from the list that don’t apply due to the fact that your firm may only grow at the same growth rate experienced over the past three years.

A Few Lessons: Hopefully you will have learned the following lessons from the exercise: • The firm and I need to act as though we were ten times larger even though we may only grow at the same rate we have over the past three years. • I personally am responsible for firm growth. • The alternative to growth is very negative, especially the affect on owner income. (See next exercise if you have not already learned this important lesson.) • We need to complete our strategic plan as quickly as possible. • It is important that everyone in the firm embraces the strategic plan. page 6

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The No-Growth Model In many firms, some owners get complacent and may want to semi-retire. They often do not realize what they are doing to younger aggressive staff and their careers; likewise, they may not even understand what they are doing to their own future. The following model shows what will happen in a no-growth firm to partner income over a period of three years.

Metric

Current Year

Year 1

Year 2

Year 3

Revenue

0%

$10,000,000

$10,000,000

$10,000,000

$10,000,000

Labor & Overhead

5%

$7,000,000

$7,350,000

$7,717,500

$8,103,375

$3,000,000

$2,650,000

$2,282,500

$1,896,625

10

10

10

10

$300,000

$265,000

$228,250

$189,663

-12%

-14%

-17%

Net Before Partners Salaries Number of Partners Avg. Income per Partner Percentage Loss

Why should accounting firms take the time to plan? The answers are simple, but sometime overlooked in the quest for the almighty charge hour. Ask yourself the following questions: • Do the owners in your firm know where they are going and how they are going to get there? • Do your employees and clients know your vision, mission statement and core values? • Does everyone know what is expected of him or her? The decision is yours—do you want to grow or experience reduced income over the next three years? Many firms attempt to cut salaries and overhead. In doing so, they lose key people (perhaps even owners), focus and momentum. Strategic planning is about the future, not the past. These lessons may be difficult for some members of your firm, but remember that all progress starts with the truth! If the answer to any of these questions is no, you should take the time required to develop a strategic plan. Since you know strategic planning is the right thing to do, you should follow a methodology that has been developed for the professional service firm and follows a proven process. It will save you time and produce positive results. Involve as many people as possible in the process. The return on investment during the execution of the plan will be several times the investment in the time upfront.

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A B O O M E R S T R AT E G I C A D VA N TA G E ™

Developing Your Firm’s: • VISION Statement • MISSION Statement • CORE Values

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CONTINUUM

The

It is very important that your firm align the continuum. A continuum is a link between stages of a process and then the blending of those links to make one continuous plan. That is the model you see here. This model has been developed to assist you in identifying where you are today in your strategic planning process. Begin at the top of the model and work your way to the bottom. Identify where your firm needs to begin working to build your strategic plan. Is your firm aligned, or do you have some work to do?

Vision Statement Mission Statement Core Values Strategic Plan Core Processes A&A

IT

Tax

Administration

Consulting

Sales & Marketing

Policies & Procedures Training Are Yours Aligned?

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VISION

Statement

The vision statement for your firm should capture its purpose and values as well as control the firm’s destiny. What do you want your firm to look like in one, three, five, ten and twenty years? A common vision defines the benefits clients, employees and owners can expect from the firm. The development of a vision statement is dependent upon a clear understanding of the firm’s dangers, opportunities, and strengths (D.O.S.)* and knowledge of competitive activities within the industry. The trend today is to make your vision statement as clear and concise as possible. This makes it much easier for employees to remember and communicate consistently.

Sample Vision Statement Jones & Company, LLP will be the major firm in the Kansas City region offering quality service to small and medium businesses and their owners. We intend to accomplish this vision by: • Creating value for our clients through leadership, relationships and creativity. • Providing learning and training experiences for all employees. • Dealing only with clients we respect.

Abbreviated Sample Vision Statement Jones & Company, LLP will be the major firm in the Kansas City region offering quality service to small and medium businesses and their owners.

Your Firm’s Vision Statement ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– page 10

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MISSION

Statement

A mission statement is a written statement of purpose. It should inspire commitment to the firm’s vision. It serves as a vehicle to coordinate actions and efforts. The trend today is to make your mission statement as clear and concise as possible. This makes it much easier for employees to remember and communicate consistently.

Sample Mission Statement Jones & Company, LLP is dedicated to implementing strategies that enhance the well being of our people and the clients we serve. This is our philosophy: • • • •

To provide quality service in a timely manner. To offer services to growth-oriented clients of integrity. To assist clients in reaching their maximum potential by open communications and teamwork. To be a firm that requires a training/learning environment for all employees to achieve and maintain the highest competence. • Encourage involvement in civic, community and professional organizations by partners and staff. • To grow, but never to lose our local identity and our personal relationship with the clients that are the foundation of our practice.

Abbreviated Sample Mission Statement Jones & Company, LLP is dedicated to implementing strategies that enhance the well being of our people and the clients we serve.

Your Firm’s Mission Statement ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– page 11

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CORE

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Values

Core values are those principles by which the firm will conduct business.

Sample Core Values • • • • • •

Client relationships Integrity and honesty Preparedness Personal development Respect and teamwork Accountability/Responsibility

Your Firm’s Core Values ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– page 12

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PLAN

The Strategic Plan is nothing more than a roadmap for accomplishing your vision. The plan should define and document the core processes. A strategic plan is a comprehensive document of the firm’s vision, mission, core values, strategic objectives, strategies and an action plan with responsible parties and due dates. We have found by reducing this to a one-page document, it is easier to communicate to internal and external stakeholders. The plan enables the firm to focus the available resources of capital and personnel on priority opportunities. The biggest mistake most firms and businesses make is to focus too few resources on too many initiatives.

Your Strategic Plan should: • • • •

Serve as a guideline for actions and decisions. Communicate, inform, motivate and involve others. Assist in benchmarking and monitoring performance. Stimulate change and future focus.

The Core Processes The core processes are the primary business processes for your firm. You will note in the previous sample graphic we have listed six core processes. These will differ from firm to firm. In some cases, you may have more—and in others, fewer core processes. These are the key business drivers that support the strategic direction and drive the direction of lower-level processes, policies and procedures.

Policies and Procedures Policies and procedures are multiple documents that establish the guidelines toward accepted business strategies and objectives and provide the instructions necessary to carry out a policy statement. These policies and procedures support the core processes and provide a framework for planning, action, and decision-making for both firm management and staff. While the development of policies and procedures is not the focus of this Guide, it is important to note that there are standards by which to write effective policies and procedures. We have found the seven-step method learned from Stephen Page very effective and appropriate for the accounting profession. Appropriate forms and checklists can be linked to any of the seven steps. The seven steps are: 1. 2. 3. 4. 5. 6. 7.

Purpose Revision history Persons affected Policy Definitions Responsibilities Procedures

You can learn more about writing effective policies and procedures from Stephen Page at www.companymanuals.com. We have also written The Guide to Outsourcing, which contains a sample policy and the related procedures for outsourcing Individual Income Tax Returns (Federal and State).

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MEASUREMENT

Your Firm’s:

Many measurement systems deliver data rather than management information. While measurement is generally the domain of accountants, they often tend to focus only on the financial measurements. For the most part, the information captured for financial reporting is often useless when it comes to making decisions on how to achieve better results in the future. Measurement systems must be aligned with the firm’s strategic plan. Be careful what you measure, as you may just get it and it may be the deathblow to your firm. Many firms still focus on charge hours and realization. By doing so, most force staff into reducing the number of hours they charge to clients. According to the statistics accumulated for firms in the Boomer Circles (ranging in size from under $2M to the largest firms) they are less than 50% chargeable. One initial response is that firms have too many non-chargeable personnel in administration, technology and marketing. Upon further analysis, it shows that pricing formulas and policies are often no longer appropriate in a “results” rather than an “effort-based” economy. Firms need a new approach to what they measure; this is not about accounting but about management. Sadly, few people have been trained to manage an accounting or professional services firm. There are far more people who own a percentage of accounting firms and have an opinion on how they should be managed than there are people who are capable of managing. The old saying “those with the strongest opinions generally have the least amount of knowledge” is certainly true when it comes to the management of an accounting firm. Action, not analysis, is what is needed. Along those same lines, measurement is not important in and of itself, but it should be part of an integrated system to enhance firm performance. Your partners and staff should know what is being measured and why. From experience, you will have no shortage of opinions as to what should be measured and how to achieve your firm goals. Again, action and not opinions are what is important. However, care must be given to the fact that in most firms, when decisions are made, the debates begin. How many of your partners and staff really understand the accounting business today? Most understand a part of the business, but the majority do not understand the entire business. Is this the reason that many firms still manage by committee? Sadly, there are no five things that you can measure and your firm will automatically improve. There are too many variables for one set of measurements to work across the industry. The measurement priorities should be determined by your strategic priorities. A few common examples of strategic priorities and the resulting measurements follow:

Priority

Strategy/Measurement

Increased revenues & profits

Revenue per full-time equivalent (total hours/2,080=FTEs)—This will allow you to measure required “head count” as well as benchmark revenues for future improvement.

Client retention

Client filtering system, surveys and financial results—You need a formal and consistent system for measuring clients and filtering out the bottom 10-20%. This will improve the retention of the clients and employees you desire to keep.

Employee retention

Training programs, remote access & flextime—The training curriculum and learning environment are critical elements in attracting and retaining employees. Measuring attendance at training, accomplishments and advancement are all important. Allowing employees to work from home and during flexible hours also are important strategies.

New services

Marketing plan and financial results—Measure the number of qualified clients/prospects contacted, track referrals and new revenues.

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ENT Tools

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& Concepts

The measurements and strategies are generally multidimensional. Measurements must be: • • • •

Accurate Objective Easily communicated and understood Timely

The key is to keep it simple so everyone can quickly understand it. Everyone must understand that the process is about progress and not perfection. It is not an easy task. It is more an art than a science; therein lies one of your primary challenges. Many partners and staff do not like the unknown. In fact, many would prefer to continue with the current systems rather than change, even if they believe the change will be better for them and the firm. Creating measurements and then doing nothing will only create more frustration; therefore, it is imperative that firm leadership decides and takes action. In today’s firm, the primary challenges facing leadership is to get the right people on the bus and the wrong people off the bus. Once you have done this, then you must get them in the right seats.

Execution Execution is the discipline and system required in order to accomplish your strategic plan. It is not just the tactics. It allows you to see what is going on in your industry and change quickly. Strategies often fail because they are not well executed. Creating the right firm culture is very important and execution should be a core element of your firm’s culture. The heart of execution lies in three core processes: • The People • The Strategy • The Operations Your reward system should be aligned and offer the greatest rewards for those people who execute. People who get things done in accordance with the strategic plan should be rewarded while those who fail should be either provided coaching so they can succeed or be terminated. If they aren’t rewarded for performance and appropriate behavior consistent with your desired culture, you will create a culture that promotes mediocrity. Some firms have done this and they find it very difficult to change once the culture of mediocrity is in place. When the wrong people are rewarded, the whole firm loses. Problems don’t get fixed and the nonperfomers are sent the wrong message. The good performers will start looking for jobs at places where their contributions will be recognized. On the other hand, if you create a culture where execution is valued and rewarded, success will continue to breed further success. Execution is the differentiating factor among competitors. Many firms know what needs to be done, but few firms execute and accomplish their plans. Accountability, consistent and concise communications, and sustaining the commitment are all important elements in ensuring that execution occurs. Execution is the responsibility of the firm’s leadership. They must stay engaged and ensure that execution happens. • Accountability • Proven Tools Accountability occurs when the strategic initiatives are driven down to everyone throughout the firm. Strategic initiatives must be assigned to task forces as well as individuals. Due dates must also be set in order to hold personnel accountable. These due dates should be reasonable, yet urgent. The tendency is to set timeframes that are too long rather than urgent. If the timeframe stretches over a long period of time, the initiatives will tend to morph themselves back to how things currently are rather than how the leaders of the firm vision. Urgent change is generally less painful than incremental change. The tool we find most appropriate and successful in holding individuals accountable is the Personal 90-day Game Plan. It allows individuals to align their personal goals and objectives with the firm’s goals and objectives.

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Strategic GamePLA Vision Statement Jones & Company, LLP will be the major firm in the Kansas City region offering quality service to small and medium businesses and their owners. We intend to accomplish this vision by: • • •

Creating value for our clients through leadership, relationships and creativity. Providing learning and training experiences for all employees. Dealing only with clients we respect.

Abbreviated Sample Vision Statement Jones & Company, LLP will be the major firm in the Kansas City region offering quality service to small and medium businesses and their owners.

Core Values • • • • • •

© 2005 Boomer Consulting page 16

Client relationships Integrity and honesty Preparedness Personal development Respect and teamwork Accountability/Responsibility

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JONES & Company LLP

Sample

Mission Statement Jones & Company, LLP is dedicated to implementing strategies that enhance the well being of our people and the clients we serve. This is our philosophy: • • • •

• •

To provide quality service in a timely manner. To offer services to growth oriented clients of integrity. To assist clients in reaching their maximum potential by open communications and teamwork. To be a firm that requires a training/learning environment for all employees to achieve and maintain the highest competence. Encourage involvement in civic, community and professional organizations by partners and staff. To grow, but never to lose our local identity and our personal relationship with the clients that are the foundation of our practice.

Abbreviated Sample Mission Statement Jones & Company, LLP is dedicated to implementing strategies that enhance the well being of our people and the clients we serve.

Strategic Objectives • • • • •

Enhance the success of the firm and its employees. Improve the firm’s succession and retirement plans. Develop and maintain the firm’s technology in order to provide a strategic competitive advantage. Implement a firm learning/training program in order to hire and retain quality personnel. Enhance the one-firm concept and develop a firm culture based upon teamwork.

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StrategicPLAN

Sample

Strategic Objective

Measurement

Stra

1. Enhance the success of the firm and its employees

• • • • •

1.1

% growth in annual revenue Growth in annual profitability % of staff achieving professional certifications Staff retention rates Comparison to peer firm statistics in Boomer Circle

1.2

1.3

1.4 1.5 2. Improve the firm’s succession and retirement plans

• Completion of a written plan • Successful retirement of one or more owners • % Funding of plans

2.1 2.2

2.3

2.4 2.5 3. Develop and maintain the firm’s technology in order to provide a strategic competitive advantage

• % of net revenue invested annually • Amount invested per FTE • Increase in revenue per FTE

3.1 3.2

3.3 3.4 3.5 4. Implement a firm learning/training program in order to hire and retain quality personnel

5. Enhance the one-firm concept and develop a firm culture based upon teamwork

• Evaluation of personal training requirements for each employee as a benchmark • Report on number of courses completed • Surveys of personnel • Focus group feedback

• Compliance with firm policies and procedures • Success of firm sabbatical program

4.1 4.2 4.3 4.4 4.5 4.6 5.1

5.2 5.3

5.4

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JONES & Company LLP

ple Strategy/Initiative

Due Date

Assigned To

1.1 Develop and implement a firm growth plan for the next five years • Complete and maintain the upside-down budget • Project internal growth—requires consensus • Project growth through acquisition—requires consensus 1.2 Develop a policy and related procedures for capital and debt requirements/limits • Operating capital • Admittance of owners • Funding of acquisitions 1.3 Manage head count to revenue per FTE in all departments • Establish prior year benchmarks • Establish goals for the coming year • Utilize outsourcing as appropriate 1.4 Develop a firm marketing and sales plan 1.5 Develop a training/learning plan (see objective #4)

September 30, 20xx

CEO–Partners

December 30, 20xx

CEO–Executive Committee

March 31, 20xx

CEO–PICs

June 30, 20xx

Marketing Director

December 31, 20xx

CEO–Legal Counsel

December 31, 20xx

CEO–Firm Adm. Task Force

March 31, 20xx

Task Force

June 30, 20xx June 20, 20xx

Firm Adm. Firm Adm.

September 30, 20xx

CEO–Firm Leaders

October 15, 20xx

CEO–HR

ASAP June 20, 20xx December 31, 20xx

Partner & IT Leader Task Force Task Force

4.1 Hire a Learning Director • Professional educator • Reports directly to CEO 4.2 Complete a training needs assessment 4.3 Develop a training curriculum 4.4 Schedule and conduct training sessions 4.5 Acquire and implement a Learning Management System 4.6 Implement a centralized help desk and Intranet

September 30, 20xx

CEO–HR

June 30, 20xx December 31, 20xx October 15, 20xx September 30, 20xx December 31, 20xx

Learning Director Task Force Learning Dir./Key Personnel IT Director

5.1 Review, document and update firm policies and procedures • Internal tax return preparation • Outsourcing policy and procedures • Financial statement preparation • Time entry and billing 5.2 Develop a firm sabbatical program • Owners: One month every other year • Principals and managers with over 5 years: One month every 3 years 5.3 Implement a balance scorecard plan • Client satisfaction • Compliance with firm policies and procedures • Financial • Training and learning 5.4 Review and update partner compensation plan

September 30, 20xx

Task Force

June 30, 20xx

Task Force

December 31, 20xx

Task Force

December 31, 20xx

CEO–Exec. Committee

2.1 Review and update all employment agreements 2.2 Develop the policy and procedures associated with the election and success of the CEO position • Term of office • Re-election policy and procedures • Job description • Evaluation procedures 2.3 Review and update all stock redemption plans • Voluntary • At retirement age • Disability • At death 2.4 Review all insurance policies and evaluation requirements 2.5 Implement and fund a 401(k) plan 3.1 Develop, approve and implement a comprehensive technology plan that integrates with the firm’s strategic plan 3.2 Hire a Learning Director to coordinate Continuing Professional Education and technology training • Professional educator with leadership skills • Excellent communications skills 3.3 Join Boomer Circles for coaching, best peer practices and the Extranet 3.4 Implement a document management system 3.5 Implement an integrated financial reporting system

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TechnologyPLAN

Sam

Strategic Objective

Measurement

Stra

1. Implement an Integrated Financial Reporting System

• • • •

1.1 1.2

% of clients converted to the integrated system % reduction in hours on client jobs Increase in revenue per FTE Turnaround time on Financial Reporting Engagements

1.3

1.4 2. Implement a Document Management System

• • • •

Reduction of external storage costs Ability to access documents via the Internet (Firm Portal) Reduction of supplies, paper and copying expenditures Implement Doc Management Surcharge

2.1 2.2

2.3 2.4

2.5 2.6 3. Develop and maintain a learning/training culture

4. Participate in a Boomer Circle for coaching, best peer practices and the resources on the Boomer Circle Extranet

5. Utilize outsourcing as a strategic advantage

• Evaluation of personal training requirements for each employee as a benchmark • Report on number of courses completed • Surveys of personnel • Increase in revenue per FTE

• • • • •

Attendance at Circle meetings Complete annual Firm Summit Utilization of Boomer Extranet Implementation of best practices Increase in revenue per FTE

• # of tax returns outsourced • Other services outsourced • Increase in revenue per FTE

3.1

3.2 3.3 3.4 3.5 3.6 4.1

4.2 4.3 4.4 4.5 5.1

5.2 5.3

5.4

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JONES & Company LLP

N

Sample Strategy/Initiative

Due Date

Assigned To

1.1 Educated partners and managers on Boomer Integration Model 1.2 Improve workflow and efficiency • Document financial reporting workflow/policies • Document tax return preparation workflow/policies • Document time reporting, billing and collection workflow/policies 1.3 Select Software vendor • CaseWare/CaseView • CCH ProSystem Engagement fx • CSI Engagement Solution 1.4 Develop a training/learning plan for integrated financial reporting

September 30, 20xx October 31, 20xx

Technology Partner

October 31, 200xx

IFR Task Force Tax Task Force Administrative Task Force Technology Committee CEO Approval

November 30, 20xx

Train/Learn Task Force

September 30, 20xx October 31, 20xx

CEO Doc Mgmt Task Force

October 31, 20xx October 31, 20xx

Tech Committee–CEO S,P&P Task Force

November 15, 20xx December 31, 20xx

Train/Learn Task Force Entire Firm

September 30, 20xx

CEO–HR

June 30, 20xx December 31, 20xx October 15, 20xx September 30, 20xx December 31, 20xx

Learning Director Task Force Learning Director/Key Personnel IT Director

4.1 Join a Boomer Circle • CEO or Technology Partner • IT Director 4.2 Attend three meetings per year 4.3 Schedule an Annual Firm Summit 4.4 Sign-up and utilize the Boomer Circle Extranet 4.5 Network with peer firms our size and larger

ASAP

CEO

Per Circle Schedule September 30, 20xx ASAP ASAP

Tech Partner/IT Director CEO Tech Partner/IT Director Tech Partner/IT Director

5.1 Review Boomer Guide to Outsourcing • Firm questionnaire • FAQs • Economic model • Sample policy and procedures 5.2 Select an Outsourcing Vendor 5.3 Implement Outsourcer’s Workflow and Document Management System • Outsourced returns • Internally prepared returns 5.4 Explore other Outsourcing opportunities • Other returns • Conversion of IFR client files • Write-up • Pension/Profit Sharing Accounting

September 30, 20xx

CEO–Tech Partner–IT Director

October 15, 20xx January 31, 20xx

Outsourcing Task Force Outsourcing Task Force

June 30, 20xx

Outsourcing Task Force

2.1 Name a document management task force 2.2 Determine firm document management objectives • Tax • Accounting & Auditing • Administrative • Outsourcing • Client/other requirements • Dynamic–Static requirements 2.3 Select software and hardware vendors 2.4 Develop standards policies, and procedures • Backup • Dynamic–Static • Document retention • Document destruction 2.5 Develop a training/learning plan for document management 2.6 Implement 3.1 Hire a Learning/Training Director • Professional educator • Reports directly to CEO 3.2 Complete a learning/training assessment 3.3 Develop a training curriculum 3.4 Schedule and conduct training sessions 3.5 Acquire and implement a Learning Management System 3.6 Implement a centralized help desk and Intranet

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MarketingPLAN

Sa

Strategic Objective

Measurement

Strat

1. Retain existing clients, obtain new clients and increase fees by an average of 10%

• • • •

1.1 1.2

% of clients retained % of new clients obtained % increase in fees Increase in revenue per FTE

1.3

1.4 2. Create and co-sponsor a major charity event for local business owners (clients and prospects)

• • • •

Ability to recruit other sponsors for the event Number of clients that attend the event Number of prospects that attend the event Amount of contributions secured for the charity

2.1 2.2 2.3

2.4

2.5 3. Maintain the firm’s position in the local and national spotlight through writing, speaking and the Internet site

• Three written articles submitted quarterly • Average of three speaking engagements quarterly • Increase traffic to the website by 20% yearly

3.1

3.2

3.3

4. Upgrade marketing materials for primary services

• Insure consistency of materials for look and message • Update materials to insure new services are disclosed

4.1

4.2

5. Develop a comprehensive sales training program for all staff

• % increase in number of prospects developed by each member of the firm • % increase in number of new clients to the firm • % increase in the overall retention of clients during the year

5.1

5.2 5.3 5.4

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N

r

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JONES & Company LLP Sample Strategy/Initiative

Due Date

Assigned To

1.1 Increase billing rates by an average of 10% 1.2 Improve client retention and prospect sales by • Sending value-creator letter to all clients and prospects • Develop a thank you letter and survey for all current clients 1.3 Implement Microsoft CRM throughout the firm • Daily reports showing consistent contacts for “hot” prospects • Training on CRM platform for further use of capabilities and functions • Define policy and procedure for all staff on CRM use 1.4 Determine the lifetime value of our clients

September 30, 20xx October 31, 20xx

Managing Partner

2.1 Select the charity and the co-sponsors that will be targeted 2.2 Contact the co-sponsors and develop a committee to work on project 2.3 Contact and secure event site • Negotiate location of event • Prepare event orders for food, rooms and speakers 2.4 Develop the marketing materials to support the event • Develop mailing list • Develop paper invitation • Develop e-mail follow up • Develop newspaper advertisement 2.5 Implement 3.1 Coordinate the writing of an industry specific article monthly • Identify and develop a list of industry publications • Electronically send article monthly and track those that are actually published 3.2 Develop speaker packets to send to industry associations • Update all bios for partners and professionals • Update presentation descriptions • Send packets and coordinate engagements booked 3.3 Review web site monthly for updates and new content • Insure that web content is updated as services change • Insure that the web site contains content that will attract clients and prospects and increase revenue to the firm 4.1 Review of all existing materials • Develop the “elevator ride” message for each service • Develop a graphic for the process within our services • Develop the “laminated brochure” for our process 4.2 Develop the first consumer guide for highest-revenue service • Complete the consumer guide tool • Develop the graphics and design • Develop a mailing list to distribute to appropriate prospects • Complete printing of guide • Implementation 5.1 Develop Sales Training Program • Research training methods for non-sales people • Develop a sales training rollout plan • Schedule training times and rollout to staff 5.2 Complete the Kolbe Index on each staff member to determine their sales profile 5.3 Incorporate training into staff 90-day game plans 5.4 Develop reporting methods for tracking of sales results • Develop electronic tracking through the firm’s CRM system • Develop the policy and procedures for the sales process • Run reports monthly to track results

Marketing Director Marketing Committee October 31, 20xx

Technology Committee Marketing Director

November 30, 20xx

Marketing Committee

September 30, 20xx October 31, 20xx

Executive Committee Marketing Director

October 31, 20xx October 31, 20xx

Event Committee Event Committee

November 15, 20xx November 30, 20xx November 30, 20xx November 30, 20xx December 31, 20xx

Event Committee Event Committee Event Committee Event Committee Entire Firm

Ongoing

Marketing Assistant

1st day of each month

Administrative Assistant

September 30, 20xx September 30, 20xx October 15, 20xx

Marketing Director Marketing Director Administrative Assistant

Ongoing Ongoing

Marketing Committee and Web Master

September 15, 20xx September 30, 20xx October 15, 20xx

Marketing Director Outsourced Graphic Designer and Marketing Committee

September 30, 20xx October 15, 20xx October 30, 20xx October 30, 20xx November 15, 20xx

Marketing Committee Outsourced Graphic Designer Marketing Assistant Outsourced Marketing Partner Marketing Committee

September 30, 20xx September 30, 20xx September 30, 20xx

Learning Professional Learning Professional Learning Professional

September 30, 20xx October 15, 20xx

HR Director HR Director

October 15, 20xx October 30, 20xx October 30, 20xx

Marketing Assistant Marketing Committee Administrative Assistant

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90DAY

The Individual

GAME PLAN

There are four primary components to the 90-Day Game Plan. They are: • • • •

Identifying priority projects Defining critical steps to accomplish the projects Setting reasonable, but urgent due dates Delegating where appropriate (create leverage)

We have created a form that will assist your firm in assigning projects and holding people accountable. Accountability starts at the top with the leadership of the firm. Everyone should maintain a current 90-Day Game Plan. This, coupled with The Progress Report*, will reduce management time while holding individuals accountable. It will also ensure that individuals remain focused and maintain their confidence.

Sustaining the Commitment Keeping the process going can be a challenge for most firms unless they develop a process that includes regular processes and reporting tools. We have found quarterly reviews the best method of ensuring that people remain on focus and stay at a high level of confidence. Confidence is important to the overall strategic planning process. Employees that have a high confidence level will achieve at high levels while employees with low confidence levels will achieve at low levels. Thus, it is the responsibility of firm leadership to sustain a high confidence level within the firm.

Sustaining the confidence level can be done through several strategies: • • • • •

Focus on successes Communicate those successes frequently Reward people for successes Coach people who fail Terminate personnel who consistently fail.

90-Day reviews work well in keeping personnel focused and committed to the strategic plan. These reviews should be done in the following sequence: • • • • •

page 24

Each person should complete a 90-Day Progress Report*. The report should be reviewed with their supervisor or the managing partner. Complete a new 90-Day Game Plan. Supervisor or Managing Partner approves the Game Plan. Successes are communicated by firm leadership verbally and through the firm’s newsletter.

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90 DAY

My

GAME PLAN

Name __________________________________ For Period Ending __________________________ Project

Specific Steps

Due Date

Assigned To

1.

2.

3.

4.

5.

6.

7.

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ACCOUNTABILITY REVIEW ... a positive look at progress

*

The final step to the quarterly process is The Accountability Review*. This report is completed by each individual to identify all the positive things that happened during the quarter and to assist in celebrating their accomplishments. This form is filled out by the individual as a follow-up to their 90 Day Game Plan.

Name _________________________________ For Period Ending ___________________________

Accomplishment

Reasons Important Further Progress Required

Specific Steps

1.

2.

3.

4.

5.

* TM & © 2005. Based on the D.O.S. ConversationTM, The 10X Mind ExpanderTM and The Positive FocusTM, concepts from The Strategic Coach ProgramTM. All rights reserved. Used with written permission. www.strategiccoach.com. page 26

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CONCLUSION Conclusion Strategic planning is an important part of firm leadership and management. Many initiatives can come directly from the strategic planning process. Some of the more important initiatives are typically related to: technology, marketing, and human resources or staffing. The one-page format of the Game Plan can be used for all of these initiatives. Don’t put this important task off just because your firm has not done it in the past or you may have tried and it was less successful than you anticipated. Use an experienced outside facilitator who can provide guidance, reduce the required time and most importantly reduce internal politics. The strategic planning process can be the first step in improving your firm’s culture, learning and training, client satisfaction, growth, technology, and profitability. You and your partners control the destiny and resources of your firm. Recognize the fact you have both a limited amount of time and resources. Through proper planning and execution, you can maximize the return on your investment of those resources, but first you must schedule the time for strategic planning.

NOTES NOTES

––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– page 27

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O

ver the past 20 years, I have worked with hundreds of professional services firms, gaining a tremendous amount of wisdom by studying why some firms are moving forward and others are falling behind. As I gathered the insights, the lessons learned and the solutions administered; a thought hit me almost like an epiphany. I have developed a formula for firms to use that will take them through three distinct stages of growth by using three elements that every firm is grappling with today. Thus was born my new book Performance3: Planning x People x Process.

In Performance3, I share the lessons I have learned and help you understand where your firm is today and more importantly, where you can be if you concentrate on the right areas of your firm. Today, professional services firms are looking for answers— not just concepts. They have a desire to move beyond where they are now and grow into a firm that is competitive in an ever changing industry. I share practical insights with readers by focusing on the three elements that have made the difference for countless others: 1. Planning 2. People 3. Process These three simultaneous areas of concentration are the essential ingredients for moving a firm through the stages of growth. Those areas of growth are: Stage 1: Incremental improvement Stage 2: Cultural transformation Stage 3: Exponential growth I believe that after reading this book, you will see your firm in a different way. You will see that a clear plan and concentrated efforts will net your firm the results that it has been looking for. My desire is that every firm that reads this book and follows the principles that are taught will not only improve, but will ultimately see they have transformed their culture and are experiencing exponential growth. Think, plan and grow! Regards,

To purchase your copy today, simply go to

boomer.com and click on the link Performance3.

L. Gary Boomer

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BOOMER CONSULTING …provides strategic planning and consulting services to the leading firms in the accounting industry through The Performance3 Formula: Planning, People and Processes. Our strategies provide a roadmap for transformation, team building and excellence. Our unique processes include The Boomer Technology CirclesTM, The Boomer Advantage GuidesTM, The Firm SummitTM, as well as technology and management related consulting services.

Boomer Consulting specializes in the following service areas: • The Firm Summit

The Boomer Advantage Guides: • Guide to Strategic Planning

TM

• Guide to Paperless Transition

• The Strategic Planning Process

TM

• Guide to Human Capital

• The Technology Review

TM

• Guide to Training and Learning

• The Team Integrator

TM

• Guide to Outsourcing

• The Paperless Transition

TM

• Guide to Succession Planning

• The Boomer Technology Circles

TM

• The Firm Coach

• Guide to Partner Compensation

TM

• Guide to Selecting a Managing Partner

For more information on any of these services, please contact Eric Hunt at [email protected], or call us at 888-266-6375. www.boomer.com page 29

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This publication is meant to strengthen your common sense, not to substitute for it. It is also not a substitute for the advice of your advisors, personal and professional.

If you would like further information about The Boomer Technology Circles™ or other Boomer Consulting, Inc. services and products, please telephone 785· 537· 2358 or 888· 266· 6375—or by E-mail at: [email protected] 610 Humboldt Street Manhattan, KS 66502–6035

TM and © 2005 Boomer Consulting, Inc. All rights reserved. No part of this publication may be reproduced in any form, or by any means whatsoever, without the written permission from the publisher, except in the case of brief quotations embodied in critical articles and reviews. 8594/12.1.05