Do partners in your firm have time to think, or are they only focused on their book of business and charge hours?

Successful firms think differently than ordinary firms. They also value the thinking process and provide time for multiple types of thinking.

To change your firm, you must change the thinking of the partners. This isn't an easy task, given the fact that most firm leaders do not embrace change. Therefore, most partners focus on the things that drive compensation and little time is spent in thinking and planning.

If this describes your firm, you may want to read about the different ways people think and the differences between firm leadership/management and line partners. The following exercise will help you identify the differences, as well as demonstrate the importance of thinking and planning.

Flavors of thinking

The following words describe different types of thinking. Please identify the top three that describe the majority of your production partners.

* Bottom-line.

* Strategic.

* Possibility.

* Realistic.

* Creative.

* Popular.

* Shared.

* Reflective.

* Focused.

* Big-picture.

Once you've done that, use the same list and identify the three words that best describe your firm's leadership group - and then identify the words that best describe your thinking.

Chances are, most production partners will be described as "bottom-line," "focused," "realistic" and "reflective." Hopefully, your firm leadership group can be described with words like "strategic," "creative," "big-picture" and "possibility."

While these methods of thinking are not mutually exclusive, they will point to significant differences in thinking and the need to communicate and build consensus. The time to do this is normally looked at as non-chargeable, and therefore non-productive. Is this a problem with thinking or with the firm's value system?

As firms grow, they tend to increase the value of leadership, management and planning. Often, in smaller firms the entire focus is on book of business and charge hours. While these are important, they are the results of efficient standards, policies, procedures, satisfied clients and a learning/ training culture. In other words, your firm needs balance in order to maximize performance. Balance is also needed in order to attract and retain quality people.

If current "thinking" is a problem, how does it impact growing firms? I believe current compensation formulas are generally outdated and need to be replaced with the balanced scorecard and pay-for-performance systems. In order to accomplish this, new thinking is required at all levels of the firm.

There are basically three motivators to provoke a person to "think." They are pain, education and reward. With the success of most firms during the past few years, it is a challenge to get many partners to think futuristically - even though they know that significant changes are ahead. These changes are primarily due to increased regulation, a lack of qualified people and the commoditization of many traditional services.

All of these changes have the potential for pain, learning and rewards, which will cause people to think. How they think may be quite different due to their position in the firm. Firms should be able to communicate a vision of what they will look like in three to five years, define objectives, and identify initiatives and strategies to meet the objectives. This is all part of the strategic planning process. Many firm leaders will say their firms are already doing this. To this I say, "Great! But are your partners really committed to thinking and acting like the future firm or the firm of the past?"

Many people in our profession started in firms that were much smaller and less regulated. Today, most of those firms have grown significantly. Some of this growth is internal, while some may be by acquisition and mergers.

Most people are capable of thinking differently and in terms of a larger organization; however, some choose not to. Thus, firm management is forced to coach these people to the next level or counsel them out of the firm. While counseling a person out of the firm goes against popular thinking, the result is that both the person and firm generally benefit from this action.

The following actions can improve the thinking in your firm:

1. Conduct annual planning summits (covering strategy, technology, human resources, training/learning, compensation and succession).

2. Reward people for participating.

3. Utilize the balanced scorecard for determining compensation.

4. Provide an atmosphere and budget time for thinking.

5. Provide consistent education and communication about the firm's vision and strategic initiatives.

6. Measure progress on a quarterly basis through 90-day progress reports.

While these steps sound rather simple, execution requires leadership, discipline and follow-through. Thinking and planning actually save time, as well as produce better results. Focusing on results rather than effort (hours) is a concept that will improve performance and the marketability of the firm.

L. Gary Boomer, CPA, is the president of Boomer Consulting, in Manhattan, Kan.

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