Boomer's Blueprint

Business transformation — shared vision or shared services?

Professional services firms can succeed financially as either “shared services” or “shared vision” firms, although shared service firms have limitations.

Your question may be, “What is the difference?” One of the biggest differences is the ability to sustain success and stay future-ready, especially in today’s disruptive environment.

Developing a shared vision is not that difficult, but many firms fail to take the time to define what they want to be, do, have, create and experience in the future. Many choose to avoid conflict or disagreement, which often results in conflict, and talent leaving the firm. It is more productive to define your vision and build your team, rather than build your team and then define your vision. In either case, firms are best served through visioning and strategic planning.

We recommend looking at a five-year window for visioning and one to two years for strategic planning with accountability at all levels. Conducting an honest assessment of your firm is the first step that should be taken.

Next, develop a strategic plan. Shared services firms can grow and prosper financially, while shared vision firms can provide more than just financial results. Shared vision firms can also provide exponential growth as well as a differentiating culture where individuals are rewarded for their significance in support of the firm’s strategic objectives. Shared vision provides direction, growth and integration with personal goals and a differentiating culture.

The following questions will assist you in determining where your firm is today. Most shared services firms are limited to incremental improvement and growth, while shared vision firms can achieve firm improvement, exponential growth, and a differentiating culture. This requires leadership, talent, technology and processes with a growth strategy, resulting in a differentiating culture.

1. Has your firm completed a facilitated visioning session?
2. Does your firm have a strategic plan with buy-in from the owners and team members?
3. Does your firm have a technology roadmap that integrates with the firm’s strategic plan?
4. Is your firm managed by a CEO and professional management team?
5. Are owners compensated for objectives other than financial, such as charge hours and book of business?
6. Or firm and office management?
7. Or development of talent and other owners?
8. Or management of talent and other owners?
9. Or client development and satisfaction?
10. Or process improvement and innovation?
11. Does your firm have succession and retirement plans in place?
12. Does your firm view technology as a strategic asset (the accelerator)?
13. Does your firm have written standards, policies and procedures?

If you answered “Yes” to 10 or more of the questions, you are well on your way to a shared vision firm; if you answered “Yes” to six to nine of them, you are in transition; and for fewer than that, you are a shared services firm.

While the benefits of being a shared vision firm are great and the dangers associated with being a shared services firm are significant, both types of firms can have financial success. The problem with shared services firms is they tend to be about the owners, rather than about the firm. It is difficult to sustain growth … especially exponential growth in a shared services firm.

Lack of succession and continuity is also a risk of a shared services firm. It takes planning, processes and the right people to be a shared vision firm. The firm must come first in order to sustain success and be future-ready (remain relevant). Once you have determined where you are today and where you want to be in three years, you can then begin implementing the appropriate strategies.

The table below ("Forms of sharing") shows some of the differences between the two types of firms. There are multiple levels, and many firms are striving to transform. Incremental change is not enough.

You can and should transform your firm; however, it requires great leadership, planning, technology, processes and talent. As Jim Collins says, get the right people in the right seats on the firm bus. These people will have skills other than accounting — e.g., project management, technology, data analytics, marketing and sales. Think — plan — grow!

FORMS OF SHARING

Shared services firm

Issue

Shared vision firm

Managing partner/executive committee

Governance

CEO/MP; C-suite with professional management

   
Little time for planning & thinking

Planning – strategic, IT, HR, succession, staff development

Yes, integrated partner & staff game plans

   
Book of business, then the firm — owners in charge of key leadership roles

Management focus

Professionals in key leadership roles — CEO, CFO, CIO, HR, marketing, etc.

   
Protect individuals

Agreements

Protect the firm and owners

   
Unfunded, often unrealistic

Retirement

Funded or unfunded, but limited

   
No plan — hope to hire future leadership

Succession

Develop leaders at all levels — plans in place

   
Overhead

Technology

Strategic asset

   
Focus on CPE requirements

Training & learning

Leadership, consulting and technical

   
Charge hours and book of business

Owner compensation

Goal-oriented; “balanced scorecard”

   
Multiple processes, often not adhered to by owners

Standard policies & procedures

Documented and adhered to by everyone