Going Corporate and the Bottom Line

A number of firms, especially the larger regionals, are going corporate. This approach to firm governance is seen as having an overall advantage over the strict partnership model as partners at different stages in their careers and with different specialties and concerns often find it hard to reach consensus or take decisive action quickly.

Corporate governance is seen as more effective because the overall profitability of the firm takes more center-stage, and a reluctant partner, not part of the executive committee, has less power to sidetrack or stymie initiatives seen as beneficial to the firm. Although this explanation is a bit simplistic, it helps illustrate that some aspects of the corporate model work very well and can be applied to accounting firms. On the flip side, there are some that don’t.

In some corporations, you are seeing a reduction in the number of middle managers, and those that remain are working middle mangers in that managing is now a small portion of what they do, and upper management is often very bottom-line oriented, constantly and closely monitoring monthly revenue and expenses. The focus becomes more on how we are doing, rather than what we are doing.

Accounting firms adopting a more corporate approach should be focused on being selective and taking the best of the corporate model while retaining the best of the partnership model.

Warning: Those who are a bit queasy can stop reading now.

So what does this have to do with toilet roll dispensers? Well there is a particular one that you will now find in many office buildings and rest stops on many Interstates. It is a jumbo tissue dispenser described as “ideal for washrooms with heavy traffic over a short period where regular maintenance is not possible. This jumbo tissue dispenser accommodates jumbo tissue rolls which help reduce the frequency of refills and controls pilferage.”

The only problem is, it’s very difficult to get to the paper when you need it. There is a tremendous cost savings, as less paper is used, making most corporate heads very happy. I wonder if it would have been better if this bottom-line approach weren’t followed in this instance.

Care should be taken that unnecessary discomfort doesn’t result for staff members and partners not on the executive team because in today’s world where staffing is an issue for most firms, dissatisfied individuals can decide to go somewhere else.

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