What do you need to do to stand out from the crowd and become a truly magnificent accountancy firm? John Monks finds out in the first of a two-part series.
What is the difference between a reasonably successful firm and a really great one? This is probably the number one question we are asked by professionals who recognise some of their competitors out-perform their peer group.
Take a look at the accountancy league tables 10 years’ ago. Some firms lurking lower down the list were often described by clients and competitors as ‘second rate’ or ‘provincial’. Some of these firms are now experiencing year on year growth, whilst building an enviable reputation.
We would describe a really great firm as one that:
- Achieves significant sustainable profitable growth
- Has the right type of client base providing the right type of work at the right fees
- Attracts and retains great people
This is of course a deliberately simple and pragmatic definition. We recognise that as an individual you will have your own view of what makes a great firm. There are, however, six more detailed attributes we believe are needed to make a good firm great.
- Design the future
- Your offer
- Business development
- Managing client experience
Design the future
How do those firms that continue to move up the league tables get there? Is it favourable market conditions that made progress inevitable? Is it that some clients who previously gave work to larger firms decide to call a few smaller ones and offer them the work on a plate? Do these firms just carry on doing what they have always done and cross their fingers hoping for significant growth?
Our observations are that the answers to these questions are no, no and definitely no. Firms that are great get there by design. They identify the change they want to achieve and they put in place the necessary actions to achieve it.
Favourable market conditions can help, but without question, the greatest firms have some clarity in their vision of where they are trying to go. We are not talking here about some ‘fluffy’ dream facilitated by well meaning consultants and captured in a poetic vision or mission statement that no one in the firm recognises. What we are talking about is a group of partners taking some pragmatic decisions and views as to where and what type of firm they want to be.
Let’s talk strategy for a moment. Some firms we talk to believe the first step to greatness is to take a deep pause, step back and engage in a major (and usually expensive) strategic review. This may take many months of in-depth research and analysis and may (if they are lucky) result in a magic ‘silver bullet’ conclusion that helps their firm shoot up the league tables. More often though the final report doesn’t really tell them anything that they didn’t already know.
We are not saying that you should not take some time to review your current position and where you intend to go. In fact if you do not invest some time in designing your future you are unlikely to achieve your ambitions. What we have concluded, however, is that the people who know your firm and how best to design the future are today’s partners and employees. Facilitating their knowledge and experience to answer some fundamental questions will ensure your design for the future direction of the firm is crystal clear.
With a 2-3 year timescale in mind, here are some of the questions we believe the greatest firms asked themselves before accelerating their growth to greatness:
- Which service lines and disciplines are we strongest in?
- Which service lines and disciplines should we stop offering?
- Which of our current clients do we need to proactively protect and develop?
- Do we need any new clients? If so, how many and who?
- What reputation do we want to build in the minds of both existing and target clients?
- Human capital: Who do we need to keep? Who do we need to attract? Who might not be part of the future?
- What political, legislative, environmental and technological factors will effect the business environment?
- What changes in client buying behaviours can be anticipated?
- What is the competition doing?
- How will the firm manage and lead the acceleration to greatness?
- What investment (money and resource) is required to achieve the plan?
When designing the future, mistakes will inevitably be made. The biggest mistake however is not to have a design in the first place. The next step is to ensure all of the proactive activity and investment in the firm is focussed on turning the design into reality. The next step to greatness is to lead the firm to make it happen.
We have interviewed hundreds of managing partners, partners, principles and fee earners to ask them what makes a great firm. Without fail leadership always ranks highly as a vital component. Not really surprising in a business that is so dependant upon people and leadership is very much about people.
Accountancy practices are staffed by bright, highly independent individuals, who chose to enter their profession to provide a particular technical expertise. They are very talented, usually highly motivated by the very work they do and tend not to work well in an environment, which tries to command or coerce them. They perform best when they understand and ‘buy in’ to what is asked of them. They also tend to be suspicious of management.
The best firms have recognised that developing the right leaders at all levels of the business is vital to achieving their vision. They understand that leadership is not about position or hierarchy but is about definable characteristics and behaviours that can be learned. As one managing partner said, “Someone leading a project team of four people in Edinburgh needs exactly the same leadership skills as I do leading the whole firm from here in London”.
Leadership is not just the domain of ‘big’ firms. One fast-growing regional firm, with a clear vision of what it wants to be, realised that it needed to equip all its partners with coaching skills to drive the necessary changes across the business. This firm also gave each partner their own leadership mentor to build particular leadership capabilities across the firm.
In our next article we’ll explore how people, your offer, business development and managing the client experience all contribute to greatness.
- How do I find the time?
- Brilliance in Business Development
- Business development: get up and go
- Making a Breakthrough