If you want this year to be different and you want your partners to look at their goals as realistic targets—you need to involve them in the process and apply a little science in the development of them. When setting partner goals this year, consider the process below—these steps will enable you to build realistic, achievable, and measurable goals for each partner:
Step 1: Pull the client run sheet for each partner with last years’ billings listed.
Step 2: Ask each partner to identify clients who have left, clients who will have lower billings than last year, and one-time project revenue that will not repeat. Subtract this number from the total.
Step 3: Then, ask your partners to identify new clients that have already signed on for next year, clients who have higher billings than last year, clients with higher planned billings due to a boost in realization, and pre-sold special projects or other new revenue known for the coming year. Add this number to the total.
Step 4: Now, consider that you will lose a few clients in the coming year. If you can use any science to determine this number (such as the average percent of billings lost per year due to unplanned client attrition) you will have a stronger final number. Subtract this number or percentage from the total.
Step 5: Then, figure in any rate increases you plan to implement. Add this number or percentage to the total.
Step 6: Finally, if you have any firm-wide initiatives that would generate a boost in billings by increasing realization or other metric that would affect the per partner or total billings, figure that increase into the equation.
NOTE: Hopefully at this point, you are not too far in the hole. I’ve seen many cases where a partner needs to find a significant amount of new revenue just to stay even with last year. This is where the “a-ha” moment usually hits. In Brandon’s case above (where the managing partner tasked him with $25K in new revenue) he may find that he needs to find $15K of new revenue just to stay even with last year, making his actual goal $40K in new revenue to have a net growth of $25K.
Step 7: Based upon the result of the calculation to this point, add a reasonable growth goal percentage or number to this total, and NOW you have a realistic and scientific goal to work from.
Step 8: Manage and measure success toward goal.
Take each goal and divide it into 12 and you have a monthly goal that will feel more achievable, and easier to measure against. Host a meeting with each partner monthly to discuss their progress toward goal. This will help you spot problems early, offer assistance and help in achieving their targets, and reassess the goal, if necessary, along the way. If you’re interested in seeing some of this science cross the chasm from concept to hard form, feel free to contact me for a sample worksheet that you can use to set individual goals for your partners.
Make this the year that your goals are met. Add a dash of science, involve your partners in the goal setting process, arrive at realistic and achievable goals, and measure and manage them to attainment.
Art Kuesel, director of practice growth and marketing consulting services for Koltin Consulting Group, helps CPA firms across the country hone and maximize their growth plans, build effective marketing and sales efforts, coach partners and managers to greater success and add revenue to the top line. Koltin Consulting serves CPA, law and financial advisory firms with strategic growth, M&A services, executive recruiting and management consulting services. Art can be reached at 312-662-6010 or email@example.com.