Every firm has values, but does your firm know how to leverage them during difficult economic times? Do partners agree upon and operate by those values? Does your staff know about those values?
Core values may appear to be secondary, but in truth they form the bedrock upon which any firm hopes to build a successful business in today's economy. As a strategic planning consultant for nearly 15 years, I have witnessed many firms express and document their core values. Having too many can undermine a firm's success. Focusing on the most important core values along with the strategic objectives related to those values offers the best results.
If your firm has already identified its core values, compare that list to the following in order to determine if you are missing anything important. What I believe to be the six essential core values are:
1. Trusted relationships;
2. Integrity;
3. Innovation;
4. Growth;
5. Teamwork; and,
6. Accountability.
It is not uncommon for one or more partners to say, "Profitability is a core value." Profitability is a result - not a core value. With that said, focus on developing strategies around these core values that will allow your firm to increase its profitability during the current economic times.
Those of you waiting for conditions to return to "normal" (whatever "normal" is) should forget about it. I believe that firms will always be faced with the need to change rapidly, because clients' needs are ever-changing. This requires ongoing learning and development of everyone in your firm.
1. TRUSTED RELATIONSHIPS
Trust is a key component in any relationship - personal or business. Trust determines the speed and cost of change. A firm that has a high level of trust built into its culture and operations is able to change more rapidly and at a much lower cost than firms that have a low level of trust. Stephen M.R. Covey, in his book The Speed of Trust, lists 13 behaviors that can increase trust within an organization. Relationships are important, because they provide confidence, which is extremely important in today's economy. Leaders who maintain the confidence of their followers will be rewarded with increased market share and profits.
2. INTEGRITY
Integrity and honesty are essential for meaningful accountability to be present within an organization. A firm's assets are its people, reputation, culture and clients. Your firm must commit fully to complying with laws, rules and ethical principles in order to protect its assets.
3. INNOVATION
Innovation provides new capabilities and creativity. It has always been challenging for firms to maintain a balance between opportunities and capabilities. Rising up to this challenge is even more critical today as the economy struggles to emerge from a recession.
Much of what students learn in college is irrelevant by the time they are three years into their careers. Innovation requires discipline and a willingness to embrace change (which has always been difficult for many accountants). Advantageous change cannot occur in a closed environment where it is resisted.
Technology is a key component in change - it is the accelerator. Partners and administrative personnel are at the highest risk when it comes to changes in technology, because they either do not have or ignore opportunities for training in IT and soft skills. Technical skills are not enough anymore for firms to employ a competitive workforce.
4. GROWTH
The future has to be brighter than the past in order for people to be committed and motivated. Firms must grow if they expect to retain and attract the brightest people. Not everyone wants to grow personally and as a firm. Confidence is important to employees and the firm.
Training and learning both should be key components in your firm's culture. Everyone should be expected to grow through sharing knowledge and wisdom. Training and learning is a two-way street. Everyone has unique abilities. A firm should place people in positions that best utilize their unique abilities and leverage the firm's unique processes. Testing, training, performance and experience all play critical rolls in an individual's growth and promotion.
5. TEAMWORK
Just as every culture progresses through growth stages, firms also evolve as they grow and mature. Most professionals participate at levels ranging from independent to partnership to teamwork. Great teams are not usually comprised of individual stars, but rather of those who understand their unique abilities and specific roles. They practice, are disciplined and show respect to other team members.
Projects and assignments dictate what role an individual is expected to play. Rugged individualists can only play to a certain level, at which point unique-ability teams must take over. Team capabilities are generally in reverse proportion to individual egos.
In difficult times, rugged individualists will revert to what initially made them successful. In a CPA firm, that generally was chargeable time. In today's economy, that isn't a wise decision, because clients' problems require complex solutions that can only be provided by a team of professionals with unique abilities. Acting as quarterback for the team is a more positive and rewarding role than trying to do it yourself.
6. ACCOUNTABILITY
Accountability starts at the top of a firm. If the managing partner and other leaders are not willing to hold themselves accountable, it becomes difficult to hold others accountable.
Defining expectations and holding people accountable to them on a quarterly basis is more relevant than what firms have done in the past. Annual reviews are apt to be too time-consuming and unproductive. Implementing a common playbook (a strategic plan) along with individual, 90-day game plans (unique-ability roles) will produce the best results. Young people entering the profession want to know the plan, their significance to it, and expectations, and receive timely feedback about their progress.
THE SUM OF THE VALUES
Firms that define strategic objectives based upon these core values will be well-positioned for the future. In addition, they will be able to change as required in order to focus their resources on their client's requirements.
Focus only on initiatives that support your strategic objectives. Determine measurements of success, identify responsible individuals and set due dates. These are all part of the strategic planning process, which can be accomplished much more effectively with the help of an outside facilitator. They can guide the firm in discovering new opportunities, while keeping it from focusing only upon tactics (a tendency for many, especially in today's economy).
One other thought: Consider the skills you acquired five, 10 or more years ago. Are they still relevant for today's way of doing business? Some probably are, but don't be surprised to find that many are not. Your soft skills may still be relevant, but your IT and technical skills are probably lagging farther behind than you realize.
Gary Boomer, CPA, is the president of Boomer Consulting, in Manhattan, Kan.
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