If the prospect of hiring a business development specialist gives you pause, you're not alone. Although this practice was historically embraced among the Big Four, midsized CPA firms have been slower to jump on the bandwagon. Until now, it's been largely unnecessary. But Sarbanes-Oxley reforms have upended a formerly predictable cosmos.
Today, significant conflicted-out opportunities are being cast off by large firms like meteors through the solar system. Finding the most efficient way to draw the largest meteors into your firm's orbit may require special expertise.
As CPAs review their spheres of influence and as clients review their provider relationships over the next 18 months, you may find that bringing in business developer assistance better aligns you to capture valuable new business.
And there are a number of well-qualified business developers becoming available, due to the downscaling of business development programs by some of the larger accounting firms. This is occurring because large firms can barely keep up with current demand, in addition to their re-evaluation of approaches in a post-Sarbanes-Oxley environment.
This article addresses some of the challenges in integrating business developers, especially in terms of the differences between them and traditional rainmaker partners.
Understanding the differences
Rainmaker partners differ markedly from business developers in background, compensation expectations, expertise and approach toward opportunity development. These Saturn-vs.-Mars disparities have made it traditionally difficult to bring business developers into the fold.
But with knowledge, know-how and a receptive attitude on the part of partners, it's possible to integrate these differences and leverage the firm's ability to grow revenue.
Difference No. 1. Rainmaker partners come from a delivery legacy, and their formative career-building years were focused on optimizing existing client relationships. Business developers come from a sales background, with their early-on careers built upon growing new business.
This basic difference impacts the way that they attack opportunities, the strategies they employ, and the priority and timing given to executing certain tactics. I remember a recent opportunity that a CPA firm client was pursuing - the partner wanted a pristine separation between a discussion of two different initiatives with the audit committee, whereas the business developer's strategy was to discuss a pending opportunity within the same meeting where the committee was reviewing the status of an already existing engagement. Our internal opportunity strategy session featured quite a heated debate regarding the proper approach!
Difference No. 2. Partners are accustomed to a higher compensation base plus a more traditional partner bonus system - often loosely and indirectly tied to performance. Business developers are accustomed to a more highly leveraged compensation plan with a lower base and "uncapped" commissions, tightly and directly tied to performance. This compensation scheme could result in high performing business developers out-earning partners - a cultural challenge where technical acumen is a most prized skill.
Difference No. 3. Rainmakers are accustomed to making things happen on their own (think golf, not football). Not only do they attract the business, but they nurture it and actually perform the work. Business developers are resource managers who operate as their teams' quarterbacks, bringing in technical and other experts off the bench as needed, but recognizing that they can't run a successful play on their own.
One of the most significant manifestations of the above differences is the disparate prioritization of activities during opportunity pursuit. Business developers often become frustrated with partners. Pursuing business is their No. 1 objective; they are motivated through compensation to pursue it with thoroughness and vigor, and they don't have the distraction of delivery responsibilities. They are formally trained in looking for signs of potential opportunity "derailment," and head them off at the pass to maintain high odds to win. They rely heavily on relationship development as a core skill.
Partners are tuned into establishing credibility and technical expertise. Relationship development and technical credibility-building are intertwined in the opportunity process. They often have a difficult time envisioning the separation of these critical components, and often perceive business developers as shallow and inconsequential. If a business developer is at a senior level of experience, this is less problematic than for a more junior lead generator, who is often instructed to go find leads and then step aside.
Partners are often proud of their individual rainmaking achievements, and feel significant ownership of their "book of business" as an indication of their historical success. To share the pursuit process with someone is not within their frame of reference. Unfortunately, when pursuing larger, competitive and complex opportunities, this mindset can compromise the odds of winning. Divide-and-conquer strategies and tactics utilizing multiple players are a far more appropriate approach.
Understand and integrate
I believe that, when properly understood and managed, business developers can lend efficiency to the pursuit of large opportunities. At firms that find themselves overloaded with opportunities and short on technical expertise, senior business developers can free skilled CPAs to focus on delivery, and take on the roles of co-development of strategy, running the plays, coordinating the resources, and "project managing" relationship development activities. And at firms that have a thin pipeline, business developers can lead-generate to fill it out.
The firm overloaded with opportunities needs first and foremost a business developer with opportunity development experience. The firm with a thin pipeline needs first and foremost a lead-generating business developer. And these are similar, but different, skill sets. Just as there are attest experts and tax experts, there are also lead generators and opportunity developers.
If a partner is unaware of this basic difference, they may make inaccurate assumptions about the business developer's role, and expect results outside their area of core competency. Business developers individually possess unique mixes of the two skills, and hiring the right profile is important to the success of the initiative.
If you do bring business developers on board, give them the best chance for success. That is, integrate them and morph your firm's culture in order to maximize their value and avoid turf wars with partners over who brought in the lead and who gets credit for the opportunity.
Among my recommendations for a successful integration:
* Develop a pipeline of opportunities and establish a structure for partners and business developers to collaborate. Define territories, revenue goals and milestones.
* Task the business developer to develop her own lead base, as well as to add value by working with partners on their opportunities. Especially early on, working with partners on existing opportunities nudges everyone up the learning curve - business developers learn the offerings and client benefits, while partners learn different and often more efficient and effective ways to attack opportunity development.
* Establish a realistic notion of how business developers work and how soon they can be expected to generate revenue. I recommend building in a ramp-up/investment period of one to two years. This will be influenced by the individual's familiarity with public accounting, your geographic base and your service offerings.
* Design an appropriate compensation package reflective of the expected activity mix (lead generation, opportunity development and ongoing account management). Remuneration should be compatible with going market rates (which could be equal to or higher than partner compensation rates), and should be cost-justified by evaluating the number of average-size transactions that the business developer is likely to close in a year. Don't expect an unrealistically high number of transactions at a size way out of line with your current average.
Let it rain!
Midsized CPA firms have an unprecedented opportunity to grow, both in terms of revenue and influence. The introduction of business development expertise is a strategy that will certainly change the dynamic in your firm, but one that can yield excellent long-term results for you and your clients.
Saturn? Mars? They may be closer than you think!
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