The link between strategy and winning on value
There is a wide chasm between talking about value and making your firm a "value-based-firm." The first step in transforming your firm from just another accounting firm into a VBF is to develop the strategic framework that will consistently deliver value to your clients.
There have been tons of articles written about strategy, its importance and multiple “how-to” models. In many articles, the discussion focuses on creating that “killer” strategy that will propel your firm to stardom and unlimited profits. Strategy is presented as the driver of top performers and although important, strategy is a step to the true driver of firm performance – value. The bottom line is that you win on value, not on strategy.
Let’s begin by understanding the strategy model that firms should use to develop their strategic initiatives for the next few years.
Here’s an explanation of each bucket and the logic of the flow:
- Growth: What is your top-line goal and the key strategies to achieve the goal?
- Organization: What changes are necessary in your organization (processes, systems, etc.) to support the successful achievement of your growth goal?
- People: What talent do you have and/or need to achieve the growth and organizational goals?
- Profit: What is your profit goal given the above and what are the key performance metrics that need to be achieved?
- Leadership: What structure of leadership and management team is necessary to drive the successful achievement of all the above initiatives?
Another way to look at it is the model presented above creates the framework to deliver on your firm’s value model. What have you chosen to set your firm apart from your competitors and to win new clients on value and not price?
Building your strategies within this model connects and aligns all the important pieces of the firm and ensures that all aspects of the firm are working in unison towards the common vision and strategy, fully supporting the value model that is critical to sustainable success.
So how does this strategic planning model relate to value? Whatever your decision is relating to your firm’s value model, to differentiate your firm from all others, it must be grounded in and supported by the strategic model that drives the organization and its people. Any value model not linked to and supported by the firm’s strategy and organization is just another slogan that quickly ends up in the graveyard of useless slogans that so many firms have created.
Why? In simple terms, the value model has to be the living, breathing culture of the firm — engrained in every employee, supported by every system and process, consistently and visibly delivered in every interaction with clients, prospects, centers of influence and anyone else that matters to the success of the firm. It is an attitude, the mojo of the firm.
Your value model has to be based on what your clients and prospects value and not on what you value, not on what you do and clearly not on promising quality and service. Make your value model a reality and something that not only resonates with your clients and prospects but that also is part of your firm’s DNA. The strategic model diagramed above is the planning framework to create that reality.
Let’s think about why. Many strategic planning models are based on some form of SWOT (strengths, weaknesses, opportunities and threats) analysis. While important, it too often results in the focus of planning on opportunities and threats without any real linkage back to how the firm actually operates. All planning needs to look at some variation of SWOT in order to create a strong baseline regarding the current “as is” state of the firm. However, planning based on just opportunities and risks without a clear and strong linkage to how the firm actually operates will fail to achieve the desired outcome every time.
Most strategic plans include a vision and mission statement component. Although necessary, the third and most important component is missing: the value model. Vision is about who you are as a firm; mission is about what you do as a firm; and value is about what you deliver as a firm. All three are essential to a closed loop structure for strategic planning. To ensure that your firm’s value model is real and that it delivers the promised value to your clients every time, complete the five steps below to value planning and see your wins as well as client retention soar.
1. Current status: Start with an objective understanding of the “as is” of the firm. What are your strengths, challenges, real opportunities and finally “targeted actions?” What initiatives will be necessary to capitalize on the opportunities?
2. Vision statement: Develop a clear and convincing value statement about who your firm is, what it stands for and what you are striving to become.
3. Mission statement: Develop a clear definition of what your firm does. What is its ultimate mission or why you exist?
4. Value model: What is the value that you will deliver to your clients and prospects, the value that they want and that clearly differentiates your firm from the pack?
5. Strategic planning model: Finally, prepare your 18-month to two-year plan using the model presented above. For each strategy within each bucket, develop the initiatives to be completed to successfully implement each strategy. For each strategy and initiative, define the deliverable and the metric of success.
Completing each of the five steps, each with the value model at its core, will successfully transform your firm to a successful value-based firm that can dramatically improve its organic growth and profitability. Now the most challenging task lies ahead — implementation — keeping everyone’s focus on the implementation of the plan and transformation into a value-based firm.