As the season approaches for firm summits (or retreats, if you focus on the past), the following list of topics will or may appear on your agenda. Many firms use these meetings to focus on the results of the current year and plan for the coming year. While this sounds logical, it doesn't always produce strategic results. The tendency generally is to gravitate toward tactical rather than strategic thinking.

Smart firms are managed with their future in mind. They don't mind taking a current hit to financial performance if it involves investing in the long-term success of the firm. Smart firms also value their people and their involvement in the strategic planning process.

While strategic advantage is a momentary thing, exceptional firms are dynamic and constantly becoming something that is different. This thought scares many accountants.

In 1942, economist and author Joseph Schumpeter wrote Capitalism, Socialism and Democracy, where he coined the term "creative destruction." Companies and products are driven out of business by the creative efforts of entrepreneurs. You are probably wondering, "How does this apply to the CPA profession?"

Are traditional accounting services exempt from creative destruction? My belief is that they are not exempt, due to regulation, innovation, technology and, most recently, reductions in the skilled labor force. Thus we are currently faced with a period of commoditization of services, pressure on fees and increased regulations.

This can either be a period of decline or a period of expansion, depending upon the approach your firm chooses to take. Some will advise you to "get back to the basics and focus on core businesses." However, the problem is that both the core businesses and the basics have changed.

In order to save you time during your firm summit, we have built a listing of the top 10 topics, common obstacles related to those topics, and sample strategies to overcome the obstacles. Without this tool you would probably spend too much time on the obstacles and not enough on the strategies to overcome the obstacles. Identifying obstacles comes from most accountants' training and cognitive skills.

The most difficult tasks are to build consensus and make decisions in a timely manner. Many firms get caught in the paralysis-through-analysis trap. Many partners get caught in the trap of thinking that, if they provide good client service and focus on client issues, the firm will take care of itself. Client service is important, but so is the firm. Take a look at the top 10 topics, and then review the obstacles and strategies.

The Top 10

1. Attraction and retention of people.

Common obstacles: Leadership doesn't value existing personnel; a lack of a human resources plan; a lack of a training/learning program; staff are working too many hours; and an insufficient supply of candidates.

Strategies: Develop an HR plan and a training/learning culture; utilize outsourcing and part-time employees during busy season; and train existing staff and improve efficiency through better processes and technology.

2. Governance and organization.

Common obstacles: Currently using the partner form of governance; a lack of a designated leader who is focused on the firm and its success; slow to make decisions; and a lack of vision.

Strategies: Develop a job description for the CEO; determine firm leaders who meet the requirements of the job description; elect a CEO for a three-to-five-year term; and evaluate performance based upon the CEO's balanced score card.

3. Revenue per full-time-equivalent.

Common obstacles: Too many people outside of busy season; an inadequate multiplier used for billing rates; and billing by the hour rather than value.

Strategies: Benchmark existing revenue per FTE (2,080 hours per FTE); establish goals for revenue per FTE - and manage to those goals; move toward value billing; use time sheets for accountability and cost analysis (not as a pricing table); use a value task force; establish written billing policies and procedures; and hold partners accountable by tying the system to compensation.

4. Partner compensation.

Common obstacles: Only focused on production; and the current system doesn't drive the one-firm concept, while creating jealousy among owners rather than incentives.

Strategies: Develop a strategic plan for the firm; evaluate the balanced score card approach; prepare a balanced scorecard for the firm and all partners; hold partners accountable; and use quarterly game plans and review.

5. The paperless transition.

Common obstacles: The lack of a plan; a lack of clearly defined objectives; a lack of integration with other applications; and resistance from some partners and staff.

Strategies: Develop a paperless transition plan, including objectives; select integrated applications to meet the firm's requirements; develop a timeline with responsible parties; and hold people accountable.

6. Outsourcing.

Common obstacles: A lack of knowledge about capabilities and economics; political views; existing systems and processes that are inefficient; and resistance to change.

Strategies: Identify a champion and task force; learn more about the vendors and their capabilities - and view them with an open mind; visit with peer firms that are successfully utilizing outsourcing; contract with a vendor and provide a privacy notice to all clients; re-engineer policies and procedures to take advantage of workflow and vendor resources; and establish the relationship and then look for additional opportunities.

7. Developing a training/learning culture.

Common obstacles: The lack of a champion or leader; a lack of training facilities; a lack of assessment, curriculum and training ladders; a lack of educational skills on staff; and a focus on continuing professional education rather than training/learning.

Strategies: Develop a job description for a learning coordinator; hire a full-time learning coordinator; assess training requirements; develop training ladders and a curriculum; conduct training sessions; have the managing partner enforce commitment; hold people accountable; integrate training/learning with the balanced score card; focus training on administrative staff and partners, as well as accountants; integrate soft skills and process training into the curriculum; and use your training/learning program as a differentiator in recruiting and retention.

8. Standards, policies and procedures.

Common obstacles: A lack of written standards, policies and procedures; a failure to re-engineer based upon current capabilities; a lack of enforcement; a lack of adherence by partners; a lack of training to the established standards, policies and procedures; and a lack of accountability.

Strategies: Initially focus on tax return preparation, financial statement preparation, and time entry and billing processes; document and re-engineer as appropriate; train to standards, policies and procedures; hold everyone - including partners - accountable; and tie the system to compensation through the balanced score card approach.

9. IT strategies and budgets.

Common obstacles: A lack of IT skills; a lack of integrated systems; the use of "peanut butter accounting" (spread it thin and no one knows how much you've spent); and resistance to change.

Strategies: Develop an IT plan and budget; hire people with IT skills; provide IT training to partners, staff and administrative personnel; assess the firm's inventory of current hardware and software; develop an integration strategy; and hold people accountable.

10. Marketing and sales.

Common obstacles: Lack of a marketing/sales plan, and lack of resources.

Strategies: Develop a marketing and sales plan; identify rainmakers and potential rainmakers; hire a professional sales person; provide training; and hold staff accountable through the balanced score card.

Make your choice

The ability to transform your firm is the key to sustainability and increased profitability. Long-term sustainability is about strategy, the ability to deal with change, and values.

Your firm's strategy must fit the competitive environment that you are in, and your values must be unquestionable. The greater the competition, the more your deficiencies will show to clients and employees. In order to overcome this challenge, your priorities of strategies, organizational structure and values must stay at the top of the list.

Success is a choice; therefore, the decisions that you make now about the direction that your firm takes are vital to the future of the firm and its employees. You have a choice ... what will the response be for your firm's future - success or complacency?

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

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