What the profession and clients need right now is confidence and a long-term perspective.
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The top three concerns I hear are partner compensation, expense reduction and cash flow.
Firms should focus now more than ever on Planning x People x Process. This is the Performance3 Management Formula. Remember, the No. 1 priority for you, your firm and its clients is to maintain confidence.
Following are 10 strategies for 2009 that will allow your firm to grow and profit even in difficult economic times:
1. Communicate with clients.
Talk to clients on a regular basis. Call them; don't wait for them to call. Ask them about their dangers, opportunities and strengths. Getting them to talk positively about negative things is the first step out of paralysis and into positive action. My prediction is you will get additional work in the consulting area.
2. Update Your Strategic Plan.
The most valuable and executable plans are those that are no more than one-page and are updated and communicated on a frequent basis. This can be done more efficiently by an outside facilitator. It will build consensus, focus priorities and improve accountability.
3. Utilize a CVO (Chief Value Officer).
All partners are not created equal when it comes to pricing and collecting fees. I strongly believe in value billing and getting away from the effort-based economy (hours times dollars).
4. Tie Partner Compensation to the Strategic Plan.
Many firms focus on strategies that will maintain current levels of partner compensation. This is not a reasonable approach. As most firms evaluate right sizing options, partners should be evaluated and terminated like other under-performers.
5. Provide a training/learning culture.
Training is often one of the first investments that firms eliminate, but I caution those pondering such a move. According to the Garner Group, training investments net five hours increased capacity for each hour spent in training. In a training-learning culture, the entire firm gets smarter and increases its capabilities.
6. Get digital: implement, leverage and train.
Firms must be careful in making large cuts and deferring investments. Software costs increase as more of the firm automates and integrates with technology. From our recent studies, software amounts to about 30 percent of the total IT investment. Firms should reduce office occupancy costs and continue to invest in IT, partner training and workflow. Compliance with records management, privacy laws and improving email management are all immediate requirements.
7. Retain quality: "cull the herd".
If you are required to make cuts, planning is critical and you should engage HR in the process. Ignoring cuts at the partner level is one of the biggest mistakes firms make - along with trimming "administrative personnel." Having accountants perform administrative functions is short-sighted and a bad business strategy. Some of the most important management positions in firms are in training, technology, sales and marketing, human resources and operations.
8. Let managers manage. Provide authority along with responsibility.
While firms often encourage the development of technical skills, people are too often left to figure out soft skills (including management) without any guidance. Leaders at this level must be developed if firms are going to grow people into effective leaders and executives.
9. Communicate with staff and partners.
Most firms say communication is often inconsistent and that partners are not on the same page. We refer to this as a shared vision versus a shared services firm. In a shared vision firm, partners are committed to the vision, although often have individual visions and simply use the firm to share overhead. Tools that can help in this process include online communities, which replace Intranets and include forums, knowledge management, resource libraries and training. The technology behind FaceBook, LinkedIn and Twitter offers firms the opportunity to create filtered networks that can directly impact marketing, sales and the client experience.
10. Re-engineer your processes for efficiency.
Many firms have re-engineered their audit practices over the past five years. Have you done the same with tax return preparation, time and billing and content management? Portals, electronic billing and collection, email management and SaaS (Software as a Service) provide firms with stronger capabilities, increased compliance, and the ability to collaborate and work remotely.
Gary Boomer, CPA, is the president of Boomer Consulting, in Manhattan, Kan.
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