CEO That People Thing Ltd
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How to keep client service consistent as accountancy firms grow
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Too busy to grow

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Every step you take on the practice growth ladder forces you to confront new chasms and dangers. Blaire Palmer offers three simple rules to guide you.

29th Nov 2021
CEO That People Thing Ltd
Columnist
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You kept your head, you took care of your client base, you pivoted or maybe you just got lucky. Not all firms have done badly out of Covid and, if you’re one of the ones who’ve come out of this strong and continuing to grow, then congratulations. The true test of leadership is how we cope with adversity and you’ve clearly been doing something right.

Of course, growth comes with its own challenges. And while many of my clients are grateful to still have a healthy business and don’t wish to complain about their good fortune when so many others have lost their businesses or had to slim down their firms to survive, success brings with it new problems.

So how do you lead through success?

1. Get out of the way

Businesses goes through stages as they grow and as you transition from stage to stage there are risks. When you go from founders working from the kitchen table to your first office space and your first employees there is a risk of failure. Think of this as a chasm you could fall into if you are stuck in your ways, or a chasm you can leap if you are willing to change.

The next chasm is when you go from a company you can easily get your arms around (around 20-50 people) to a scale that requires a layer of management beneath you.

There is another chasm at 100 people (you may need middle managers) and as you grow further you inevitably face new chasms. Whether you are buying or selling, for example, mergers and acquistions can be a major opportunity, or a major risk.

At each stage you have to let go of what you were and embrace being something new. You have to decide what is core to your firm’s identity and what needs to be jettisoned.

For instance, you may have been very hands-on with clients until now, coming into meetings frequently or picking up the phone to keep relationships strong. As you grow you may not be able to do that yourself.

It can be hard to accept that clients might not know who you are and vice versa. It can be difficult to empower others to have these relationships and not you. And, of course, you have to figure out what your job is now. You’re now managing the leadership team, you’re working on strategy, you’re thinking about your firm’s culture. There may even be a period of mourning as you come to terms with what you have let go of.

But if you keep doing what you’ve always done you will inhibit other people. You’ll be slowing the business down. You’ll be in the way. Find out how you can add value now and let others do what you hired them to do.

2. Be vigilant about waste-of-time activities

When you were a team of 10, had eyes on everything and could communicate informally and randomly you didn’t need a lot of process or structure. If something fell through the cracks someone would pick it up. You were small and everyone knew what was going on.

As you grow that’s no longer possible. You need to become more efficient. Information can’t just be held in people’s heads and shared verbally. You need meetings that have a clear intent and clear outcomes. You need paperwork to be handled by as few people as possible. You need to figure out what adds value and what wastes time.

There’s a saying in advertising that half of advertising budgets are a waste. The trick is knowing which half. Well, let’s assume half of everyone’s time in your firm is wasted. Your job as you grow is to work out which half. Look for inefficiencies that stop people being able to do their best work. You may need managers, but are they enabling others or slowing things down? Are meetings effective or are they taking people away from doing real work? Is paperwork helping your people be accountable or is it a distraction from serving clients?

Deal with this now or it will only get worse.

3. You can’t have it all

Fast. Cheap. High quality. You can have two out of three. Which ones do you pick?

When you are small it is possible to do all three. Obviously there is a price to pay – you work too hard to deliver perfection against ridiculous deadlines and you don’t charge enough. But that model isn’t sustainable as you grow.

Many clients complain to me that they want to do it all. They want to promise their clients high quality without costing much and they want to be hugely responsive to their clients’ needs. I hate to disappoint you. You’ll go out of business.

As you grow you attract different employee personalities – people who are interested in an established firm rather than a startup. It’s a different mentality. They’ll work hard for you, but they aren’t going to make the sacrifices you were willing to make when you started out.

Plus, as you grow you’ll start employing people who don’t have billable hours – admins, HR, operations people, managers. Your margins are going to get tighter. Something has to give. Cut your overhead and make yourself cheaper, but live with the risk that quality suffers. Invest in people to improve quality, but raise your prices. Or cut costs and keep quality high, but tell your clients they will have to wait.

It’s time to decide. Fast growth isn’t always permanent. As you approach your next chasm, remember that unless you’re willing to change your business, change your role and change your ways of working, you can just as easily end up back at the kitchen table.

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