According to Dom Esposito, CEO of ESPOSITO CEO2CEO, a CPA firm must move many rocks that are on the path to growth. If a firm doesn’t effectively address these obstacles, it will not be able to grow at a satisfactory rate.
The following are six growth path rocks and how you can begin to move them.
Ineffective Leadership and Governance
The CEO has the broad responsibility to create a culture that drives revenue and profitability. In addition to the CEO, firms need two standing groups to drive growth and achieve success. The first is a senior management team that includes a COO and office MPs. The second group is an executive committee that oversees the execution of operating budget, addresses partner matters, makes sure that the partnership agreement is up to date and reflective of a firm’s needs, and evaluates the effectiveness of the CEO and the senior management team.
Need for a Broader and Deeper Menu of Services
A firm attracts and retains clients by adding value through industry specialization. The greatest growth and margin opportunities for a firm are in advisory and consulting, as clients outsource specialized skills to deal with business challenges that they cannot handle internally.
Lack of a Strategic Plan
A strategic plan provides direction and gets partners on the same page. It instills discipline. It is a vehicle for individual partner goal-setting, periodic monitoring, counseling and an annual evaluation that forms the basis for annual partner compensation adjustments.
Poor Strategy Execution
Many CPA firms undertake exhaustive strategic planning but don’t use the plan as a living, breathing tool that holds partners accountable through a performance management and compensation system. Some firms go through this exercise to produce a plan that eventually sits on a shelf gathering dust in partner offices. This is a missed opportunity because a sound strategic plan, if executed properly, is a great leadership and management tool that can enable a firm grow.
Inability to Align Strategy to Goal-Setting and Accountability
Actionable results need to be periodically measured against goals and modified if certain goals are deemed unrealistic. Compensation adjustments should be made according to progress made toward these goals. Partners know that a firm is serious about strategy execution if they can measure the impact their participation has in their wallets.
Price is Always Why We Lose
According to Esposito, the thought that price is main reason your firm loses clients or proposals is a myth. Price is a one-dimensional sales pitch whereas value creates motivation for clients to select your firm. Value is perceived benefits less perceived cost. Clients and prospects want a firm that will help their business grow and be more profitable – a firm that brings real value to the relationship.