IMGCAP(1)]Before 2007, James, the managing partner of a $2 million accounting firm, was happy.
He began his firm in the early 1980s and since that time the firm steadily grew by clientele and staff. James’s firm grew by 10 percent to 15 percent per year for the first 20 years. The growth James’s firm experienced was at first by pounding the pavement and hunger.
To help support his growth he quickly named another partner for his great technical ability and then in 2001, James named another partner simply because he was afraid this person would be offered a partnership at another firm and leave.
The firm was growing, staff morale was high, and the issues plaguing the firm were consistently swept under the rug because, let’s face it, they’re not pleasant to talk about. James had become lackadaisical in his approach to business development in the past 10 years, and neither of his partners generated business, but at that time they did not need to. The firm had all the business it could handle and getting business was easy; they would simply pick up the phone when it would ring.
In 2007, something happened; the world surrounding James’s firm began to change. The phones, which once were providing a means for developing new business, stopped ringing. For the next several months James and many other accounting firm leaders did the same thing—nothing. It was not until the end of 2007 that James and his partner group began to talk about what was going on. The firm’s growth was flat, and since costs went up, the profitability of the firm was down. The following year the phone continued to not bring in business. During this time the partnership became strained and employees were let go.
Extinction
Extinction is a natural behavioral process where a behavior (i.e., picking up the phone) no longer produces a previously contingent consequence (getting new business), leading to the reduction or elimination of that response. This behavioral process affects all living beings throughout their entire life. This process typically causes us to change our approach to access the previous outcome. The amount of time it takes to change behavior patterns often depends on a person’s history with the old behavior pattern.
James and his partners faced a decision: do we continue to wait for business to come in or do we change? The firm had lost several large clients, and although they had cut costs, profitability continued to shrink. This is where insanity comes in; according to Albert Einstein, insanity is doing the same thing over and over again and expecting different results. When most of us hear the term “insanity,” we typically think of asylums or movies such as One Flew over the Cuckoo’s Nest.
However, according to Einstein’s definition, it is probably a failure to recognize that the environment has changed, and people continue to engage in the behavior (picking up the phone and expecting it to be new business) long after the previously contingent consequence is no longer produced (a prospect on the other line wanting to work with your firm).
James’s firm changed. James decided it was time to hold himself, his partners and his staff accountable for the business of the firm. This change was not easy. New systems had to be put into place, the firm required a new strategy and vision for the future, partners required business development training, goals and expectations were set for all professionals including the partner group, and James began to lead his firm by example and through accountability.
The world in which we do business has changed. So the question becomes: what are you doing about it? Are you going to continue to try to put the square peg in the round hole or are you going to start reshaping your peg? No one is saying the change required is going to be easy. However, it is necessary for firms to survive the change. Because, continuing down the same path… well, what would Einstein say about that?
Bryan Shelton, M.S., is a senior consultant with the Rainmaker Consulting Group.
