it’s not the time for minding and grinding.
by joseph tarasco
during these unprecedented times, it is difficult to predict the future. thus, leadership should focus on planning for various options based upon as many possibly scenarios as possible. this type of planning explores plausible potential business models and implementation processes for impending unknowns.
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however, consider the following predictions and trends in your strategic planning for 2021 and beyond:
- covid-19 and its effects on businesses have increased audit risks and will eventually escalate professional liability claims and settlements.
- client fee pressures, increased competition for quality staff and clients, rising staff labor costs, increased regulations and client demands will force firms to carefully examine their mix of services, industry concentrations and niches. client engagement profitability will be more scrutinized and evaluated and partners will be held more accountable for increased realizations.
- the future will bring tremendous opportunities for accounting firms that are highly leveraged; with well-trained professional staff; and using state-of-the-art technology, outsourcing methods and processes, and increased efficiency methods. firms will continue to offer remote work options beyond 2021 to compete for talented professionals.
- to take full advantage of the favorable marketplace for accounting firm services, partners need to be highly effective client relationship managers, trusted advisors and rainmakers – not grinders. firms of all sizes will increase their menu of consulting and advising services to remain competitive.
- as succession planning evolves into a crisis mode, career development and leadership training will be further expanded into firm cpe curriculums. progressive firms will significantly increase their training budgets. to remain competitive and avoid merging into a larger firm, partners will have no choice but to invest heavily in their “best and brightest” staff in all stages of their careers.
- across the country, consolidation of firms will continue at a faster pace, especially with four- to 15-partner firms.
- there will be more mergers of public accounting associations and networks.
- more small firms will split up because of a lack of partner consensus on succession planning and the strategic direction of the firm.
- firms will increase their efforts to recruit talented partners from other firms. ideal targets will have leadership and practice development skills and partners who are specialists/experts in industries and niches.
- as the war for talent goes into a “crisis mode,” firms will invest more resources into continuous recruiting efforts and hire more in-house recruiters.
- the firms that have grown through the consolidation of aging practices will begin to address intensified succession planning issues. a primary objective is to transition clients to qualified partners who can play the trusted advisor role and retain the transitioned clients.
- more firms will merge as a competitive strategy to gain more resources and service capabilities, rather than for near-term succession problems. there will be more mergers of megafirms into larger regional firms. firms will continue to acquire consulting and advisory companies that complement their traditional services.
- managing partners and executive committee members will be held more accountable by their partners. attention will focus on their ability to lead and manage successfully and to achieve the goals and objectives, as documented in the firm’s strategic plans.
- technologies such as artificial intelligence and robotic processes will continue to advance at an increasing pace.
- rapidly changing technology will play an even more significant role in marketing professionals’ programs and plans. as a result, marketers will be better equipped to generate roi-driven reports, perform precise market research, collaborate with business development professionals on customer relationship management and targeting prospective clients, implement digital marketing and social media campaigns, and use video interviews and creative designs, including infographics, to illustrate client case studies and testimonials.
- diversity, equality and inclusion will continue to be a competitive differentiation, especially in attracting the best talented professionals.
- there will be an increase in the number of firms hiring lead generator/business development professionals to compete with larger firms and supplement the practice development efforts of their partners.
- the need for diversified multifaceted marketing professionals will become even more necessary to maintain a competitive edge in the local marketplace. as a result, more firms below the top 200 will outsource their marketing and practice development programs to consulting companies.
- as the lack of qualified professionals continues to be an obstacle to growth, the role of internal marketing professionals will continue to expand and increase in the areas of recruiting and hiring practices to attract quality staff, partners and m&a candidates.
- the partnership structure will continue to fade away and will be replaced by a more corporate type of structure. more firms will hire professional coos to assist the partners in managing their organizations.
- partner compensation will be more geared toward higher levels of profitability and less top-line emphasis, and by results-driven contributions to the future success of the firm.
- aligning the firm’s goals and vision with partner performance criteria and accountability will be a key objective for progressive firms.
the firms that engage in the following initiatives will be in a strong position to take advantage of the huge opportunities in the public accounting marketplace in 2021 and beyond:
- attract, develop and retain the best staff possible.
- run their firms more like businesses vs. practices.
- the partners are willing to be managed and held accountable for results.
- the partners are good role models for the staff and work together to create desirable cultures.
- firm leaders address important matters with a sense of urgency and make necessary tough decisions.
- have contemporary and strategic leadership throughout the organization with a plan and vision to take the firm to the next level of success.
- hire the best possible hr and marketing professionals with well-run departments.
- adapt quickly to leading-edge technology for firm operations and to service clients’ needs.
- offer more formal advisory and consulting services.
- strategically position their services, industry specializations and niches in the right segment of the marketplace to maximize roi.
- control their direct labor costs through process improvements, state-of-the-art technology and strict financial management of engagements.
planning for potential forthcoming scenarios and developing action plans for each is critical. examples of possible scenarios are:
- the covid-19 pandemic continues with high infection rates well into 2021 until vaccines reduce the spread. the economy is more severely damaged than originally predicted.
- covid-19 cases reduce sooner than expected and the economy bounces back strong early in 2021.
- another scenario between numbers one and two above.
- regardless of the above, many staff do not feel safe regarding returning to the office and/or using public transportation to commute to work.
the future is bright for accounting firms that can quickly implement initiatives and strategies to adapt to the changing marketplace and the needs of quality clients.
“it is not the strongest of the species that survive, not the most intelligent, but the ones most responsive to change.” – darwin