6 rocks in the path to growth

and how to move them.

by domenick j. esposito
8 steps to great

“tiger woods did not always win majors with ease; after his narrow victory in the 1999 pga, he slumped and sighed as if he’d been carrying rocks uphill all afternoon.” – john updike

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a cpa firm must move many rocks that are on the path to growth. if a firm doesn’t effectively address these rocks, it will not be able to grow at a satisfactory rate.

here are six “growth path” rocks and how a firm can begin to move them:

ineffective leadership and governance
need for a broader and deeper menu of services
lack of a strategic plan
poor strategy execution
inability to align strategy to goal setting and accountability
price is always why we lose

1. many firms with unsatisfactory growth do not know what effective management and governance or an effective ceo look like. this environment creates dysfunction, bickering and infighting among senior partners and is a rock that needs to be moved.

firms that aren’t growing at an acceptable rate usually have a ceo who grew up in small firm environment without exposure to what it takes to operate a growing, dynamic firm. in these cases, the ceo is usually the biggest biller or best business development partner. in a growing, dynamic firm, however, the ceo is not the biggest biller or the best business developer. he/she is a person who has the broad responsibility to create a one-firm, firm-first culture that drives revenue and profitability.
these firms also have too many part-time committees that get little, if anything, accomplished. as firms grow, more corporate structure is required. in addition to the ceo, firms need only two standing groups to drive growth and achieve success:
- a senior management team, serving at the pleasure of the ceo, that includes a coo and office managing partners
- an executive committee, not involved in day-to-day operations, that oversees the soundness of a firm’s strategic plan and execution of operating budget; addresses all partner matters including mergers/acquisitions, new partner admissions, terminations, compensation and discipline; makes sure that the partnership agreement is up to date and reflective of a firm’s governance needs; and evaluates the effectiveness of the ceo and the senior management team

2. without a broad and deep menu of services, a cpa firm will have difficulty growing. if a firm doesn’t move from a generic accounting firm model to a professional services firm model built on a foundation of go-to-market industry specialization and an array of advisory/consulting capabilities, the firm will bump into another rock on the path to growth!

a firm attracts and retains marquee clients by adding value through industry specialization that demonstrates a knowledge of an industry sector and the ability to bring solutions that help address business challenges.
the greatest growth and margin opportunities for a firm are in the advisory and consulting area as clients outsource specialized skills to deal with business challenges that they cannot handle internally. examples include:
- bankruptcy and restructuring
- computer forensics and ediscovery
- litigation assistance
- governance and risk
- transactional advisory
- valuation advisory
- management consulting
- wealth management

3. many cpa firms do not have a living, breathing strategic plan that enables them to successfully navigate through their next two or three years. lack of a well executed strategic plan is another rock in the way of growth. a strategic plan that is properly executed is the compass that can navigate a firm through its life cycle. a strategic plan:

provides direction and gets partners on the same page. it instills discipline that requires delivery of reliable commitments as opposed to broken promises or lip service.
is a vehicle for individual partner goal setting, periodic monitoring, counseling and an annual evaluation that forms the basis for annual partner compensation adjustments

4. many cpa firms undertake exhaustive strategic planning but don’t use the plan as a living, breathing tool that holds partners accountable through a performance management and compensation system. another rock that needs to be moved! these firms go through an “exercise” that eventually sits on a shelf (perhaps in gift wrap and a bow) gathering dust in partner offices. that’s a missed opportunity because a well thought-out strategic plan, if executed properly, is a great leadership and management tool that enables a firm to grow.

5. the key to successful strategy execution is the alignment of the firm’s strategic plan with individual partner performance goals. this is where so many firms fail and is another rock that needs to be moved!

actionable results need to be periodically measured against goals and, if appropriate, modified if certain goals are subsequently deemed unrealistic.
tie progress against goals into compensation adjustments. partners know that a firm is serious about strategy execution if they can measure the impact their participation has in their wallets.
ensure appropriate training and coaching of line partners and senior management.

6. how many times have you heard that price is main reason your firm loses clients or proposals? too many times? well, it’s a myth that is another rock!

price is a one-dimensional sales pitch. either your firm bid the lowest price or you did not – end of story and end of sales pitch. any firm can sell price. if a firm’s growth strategy is to compete on price, a firm must have an organizational model and processes that enable it to be lowest cost provider – or the firm loses.
selling value for fee is what clients and prospects want as they seek a firm that will help their business grow and be more profitable – a firm that brings real value to the relationship.

value is perceived benefits less perceived cost. it creates motivation to select your firm. look at almost any firm’s website and 95 percent or more of it is about their services, their people, their areas of expertise and short client testimonials that no one really relies on to make any retention decision. has anyone seen a firm website that has as its focus the value it brings to its clients as opposed to fair price, great service and top quality – “givens” claimed by all firms?

posted on august 24, 2017

dom esposito

about the author

domenick j. esposito was the ceo of grant thornton, vice-chair of bdo, and national growth director at cohnreznick.

he is the author of "8 steps to great: the eight essential strategies driving success at the world's largest cpa firms. and how to apply the lessons at firms of all sizes," published by 卡塔尔世界杯常规比赛时间.

a life in public accounting

in 2016, esposito, then a former ceo of bdo, moved from a 46-year career in public accounting into the next phase of his professional life – consulting to cpa firms, launching a boutique advisory firm, esposito ceo2ceo, that provides advice to ceos, managing partners and other senior partners of cpa firms focused on the mid-market throughout the u.s.

with the launch, esposito authored “8 steps to great," a guide for ceos, managing partners, and other senior partners on how to move their firm to the next level.

cohnreznick national growth director

esposito was one of the most qualified individuals in the country to advise cpa firms on growth and profitability. through 2015, he was national practice & growth director and an executive board member of cohnreznick, llp, a mid-market sustainable brand and the tenth-largest cpa firm in the united states. he oversaw cohnreznick’s go-to-market industry specialization and consulting and advisory service lines. he was also intimately involved in the firm’s mergers and acquisitions and strategic and tactical activities for its public company and capital markets initiatives. dom joined the predecessor firm of j.h. cohn in 2002 as the chief operating officer and executive board member.

dom was also an independent director of ethan allen interiors inc. for several years (through 2014), dom was a member of the nasdaq listing and qualifications committee to the organization’s board of directors. he formerly served as the leader of the new york state society of cpas committee for large and medium-sized firms practice management. he also was an adjunct accounting professor at c.w. post/long island university.

bdo and grant thornton

through october 2002, dom was vice chairman at bdo, a mid-market sustainable brand and the seventh-largest international accounting and consulting firm in the u.s., with almost 50 offices and 3,400 employees. during his brief time with bdo, he was responsible for the alliance distribution network (at the time consisting of over 80 cpa firms, 10 law firms, and 25 consulting firms). he was also responsible for attracting and servicing a number of clients.

from 1979 through 2001, dom was with grant thornton, another mid-market sustainable brand and the sixth-largest international accounting and consulting firm in the u.s., with over 50 offices and 4,500 employees. he joined grant as an audit manager, became a partner in 1981, led the long island office from 1984 to 1986, became assistant managing partner of the new york office in 1986, and from 1988 to 1999, led the new york office. in 1999, esposito became a regional managing partner and for two years, through 2001, was the firm’s chief executive officer.

cpa, partner, mba, leader, influencer, media celebrity

between 1996 and 1998, and while he was ceo, esposito was on the partner board and was also on the board of grant thornton international – the worldwide umbrella organization. in these capacities, he developed strong experience in strategic thinking and execution, international relationships, corporate governance, partnership matters, branding, expense control, client relationships, and new business development.

as ceo, he took grant thornton to record earnings, consummated the largest line-of-business sale in the firm’s history, developed a major joint venture with axa financial, and made the largest practice acquisition in the firm’s history. from 1969 to 1979, esposito was with price waterhouse (now pwc), servicing ibm when he was promoted to manager in 1976.

dom was a cpa, has been quoted in national and local media, and has appeared on radio and cable tv.

esposito also testified before the securities and exchange commission.

he received his m.b.a. from st. john’s university and his b.s. from ferris state university. accountingtoday, one of the leading trade journals for the accounting profession, named esposito one of the most influential people in the profession for two consecutive years.

he passed away in 2021 at the age of 74.

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