five steps to building advisory work

both the who and the how.

by bill penczak

the nirvana (in the esoteric sense, not the kurt cobain context) for cpa firms is to provide “higher value” work for their clients, which traditionally means guiding them with process improvement, predictive analytics on business drivers, or taking proactive measures to reduce risk or tax burden.

more: the six essential kpis for managing partners | the great resignation: five reasons accountants are quitting | five global cpa leaders: four survival strategies | planning for success in 2021 | do you have the guts to beat the covid crisis?
exclusively for pro members. log in here or 2022世界杯足球排名 today.

it is a career builder for your staff and a noble aspiration for the industry.

but while i have heard managing partners talk about the notion of higher value work, when pressed, they are often at a loss as to what that work would be, and more importantly, whether their mid-level and junior-level staffers (or even partners) have the true skill set to move into the major leagues.

the burden of meeting compliance deadlines weighs heavily on most staff, and they are weary from deadline pressures of clients’ immediate needs to consider much else.

perhaps this is the opportunity to help chart your best and brightest to the next level, not only for fear of losing them to industry or another firm, but because as a firm leader, it’s the right thing to do.

step 1: identify your best client “minders.”

david maister is credited with the term “finders, minders, and grinders” in cpa firms. finders are the hunters who can develop new relationships, minders are those who devote themselves to clients and their needs, and grinders are the brilliant technicians who can answer all the tough technical questions.

in maister’s vernacular, i would suggest that the minders are those who are best suited for “higher-value work.” that is because they know the client and their business challenges, have a good relationship with the client to have tough conversations and are likely highly valued members of the client’s financial team.

the radical idea here is to identify some of your rising stars and place them in charge of this initiative. they have the impetus to excel, would appreciate the challenge of creating something new and owning it, and are likely to get more done than a tenured partner with nothing left to prove.

step 2: specifically define “high-value work.”

according to a survey by the national center for the middle market, businesses’ top challenges at the end of 2020 were, in order of importance:

• maintaining customer relationships
• growing uncertainty
• maintaining employee communications
• continuity of operations
• working capital

(visit the link above to see the shift in priorities from march 2020 to december 2020.)

given the typical skill set of the typical cpa firm, i would suggest that the lowest hanging fruits from the aforementioned bunch are in the areas of operations and working capital. but the next step should shed additional light on the path forward for creating increased value for your clients.

step 3: interview your clients and prospects about their needs and receptivity to consulting projects.

in 2016-2019, i personally conducted more than 150 1:1 interviews with firm clients as part of a client satisfaction process, which included two sections: client feedback on how the firm performed and a resulting “net promoter score,” and a discussion on challenges facing the company. in most cases, the clients politely engaged in the conversation about how we did and offered great feedback. but the very demeanor of the clients shifted when we inquired about their business, their challenges and future plans. that served as a reminder of what is really important to your clients. the very act of discussing their business, absent of talk about audit and tax, is a client-bonding opportunity. but if the conversation is properly crafted, firms can discover all kinds of opportunities that don’t arise in the course of completing a tax return. (if you are interested, i can share the framework that i used for these interviews.)

the input from half a dozen clients should provide enough fodder to develop an action plan to form a practice on middle market consulting, as it’s likely that your clients have similar challenges, regardless of their size or their industry.

step 4: “productize” your solutions.

more evolved firms have taken this approach with their client accounting services practices. the hallmarks of this “productization” is to tightly define the scope of your services, a clear pricing approach, specific deliverables and expected outcomes. make sure your value proposition is clear, and absent of any consultant-speak. i found an example from a national firm’s website that illustrates how not to describe your consulting services:

as companies assess future opportunities and position for growth, they need a strategy to achieve the speed that can break organizational inertia …

enough said.

the productization process includes:

• defining the specific benefit and outcome for the client
• outlining the tools and inputs needed to form an approach
• benchmarking performance on a continuous basis
• defining roles and responsibilities for your staff and that of the client
• detailing the internal action steps for the firm to achieve those goals
• a pricing model that generates a target margin, which i would suggest is north of 40 percent
  

step 5: set specific goals and action steps for this new practice area.

i once worked with a client who jumped on the internal audit bandwagon and hired not one but two former big four principals to run the practice. they brought more pluck than process, thick rolodexes with promises of success, but lacked specificity in terms of pursuit strategy, how the practice would grow internally or detailed plans on how they would win new business. fast forward 18 months, and one principal was ousted, and the other shifted to another “shiny object” practice area that likely suffered the same fate. i’ve been told i’m somewhat pedantic in my approach, but i’ve come to believe that if you don’t have a detailed work plan (just like firms do for audit and tax work), new initiatives are doomed to failure. i have a planning framework i have used with numerous cpa firm practices, and happy to share it if you are interested.

firms are often guilty of having smart people do stupid work. creating a sustainable approach to “higher value work” for clients is a virtuous circle – it can enhance and expand your client relationships and provide a path forward for the people who can be the future of your firm.

 

posted on december 5, 2021