Ian Vacin concludes his strategic planning series looking at how firms can achieve their overarching goal and determinant of success.
Every accounting firm needs a purpose, strong values, and clear objectives. With these firm foundations comes a responsibility to ensure you entire team is focused and working together to achieve these shared goals.
You can liken your staff to a team of rowers. When they row in sequence the boat speeds towards the finish. But if they are out of sync, the boat will struggle to just go straight. You need to lead your team, point them towards a singular and simple goal.
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In my prior articles on the foundations of the firm, I outlined the prescription to being purposeful. Now, you need to ensure everyone on your team is aware of their own responsibilities, knows the impact their own work has on the overarching firm objectives, and is focused towards achieving the results that matter.
For this, your firm needs to have a singular objective that is the key to your firm’s success both short and long-term. This is the starting point of your strategic planning.
We call this objective your Big Y, True North or Key Objective. It is your team’s rallying cry, your clear determinant of success, and your point of alignment in the firm (from partners to doers).
“True North is your orienting point - your fixed point in a spinning world - that helps you stay on track as a leader. It is derived from your most deeply held beliefs, values, and the principles you lead by,” wrote Bill George, the author of Discover Your True North.
So first, decide what your overarching goal and determinant of success is. There are several categories of firm objectives to choose from including:
- Growth: Increase in revenue, margins, and/or client count
- Expansion: Increase of services offered or resources available
- Efficiency: Do more with less (or in less time). Free up capacity
- Simplicity: Remove services or client types. Balance seasonality
- Transition: Evolve to a progressive firm (e.g. value pricing, tech)
- Lifestyle: Limit firm hours, location dependency, or staff size
You need to be specific. If your key objective is growth, for example, you need to consider whether it is growth in client count, revenue per client or profitability. Then, how much growth: 10%, 20%? Your key objective needs to be simple and measurable, obtainable and inspiring.
When determining what your key objective should be, be sure to take into account these:
- Requirements: Simple, clear and concise. A stretch, yet attainable
- Number of objectives: Ideally one, but up to three
- Measurable: “Increase [object] by XX% in the next XX months”
- Specificity: High-level (details reside in the strategies)
- Time horizon: Typically, one year (as part of yearly planning)
- Audience: Everyone in the firm
Once you have your key objective determined, then you can move on to setting the key strategies (no more than three per person) to achieve the key objective.
Start from the partner and cascade down the organisation with each person determining their three strategies that ladder up to their superior and ultimately up to the key objective. By doing this, you ensure alignment up and down the firm with everyone rowing in the same direction.
What does this look like when done correctly? Below are two examples from Karbon Academy participants:
Key objective (example one): Increase revenue by 25% within the next 12 months.
- Priority 1: Implement fixed fee pricing
- Priority 2: Define niche market on which to focus
- Priority 3: Improve sales process to close more opportunities
Key Objective (example two): Increase revenue / employee by 25% and revenue per client by 35% through specialization & adding value.
- Priority 1: Dissecting the client list
- Priority 2: Learn to communicate the value
- Priority 3: Increase our fees
When your firm gets larger, it becomes even more important to be laser-focused. It’s vital to ensure critical resources aren’t wasted and that everyone is empowered to do the right thing.
It all starts with a singular, measurable objective that everyone in the firm can point and align themselves to.