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things are changing and the old growth model no longer fits.<\/strong><\/p>\n by gale crosley<\/em> from the outside it might appear that public accounting is much the same as it has always been. cpas pursue traditional activities such as tax, audit, and consulting services. to build their business, they lunch with lawyers and attend after-hours cocktail receptions.<\/p>\n more by gale crosley: \u00a0<\/strong>think growth, not marketing<\/a>\u00a0|\u00a0not all fish need audits<\/a>\u00a0 |\u00a0\u00a0the 4 new growth engines in today\u2019s marketplace<\/a>\u00a0\u00a0|\u00a0\u00a0change catches up with auditors<\/a>\u00a0 |\u00a0\u00a0the 6 elements to sustainable growth for cpa firms<\/a>\u00a0 |\u00a0jody padar\u2019s new vision for the \u2018new accounting\u2019<\/a>\u00a0 |\u00a0\u00a0reality check: achieving world-class growth requires real-world intelligence<\/a>\u00a0 |\u00a0\u00a0crosley: the new growth evolution<\/a>\u00a0 |\u00a0\u00a0expand your vision and expand your business<\/a>\u00a0 |\u00a0\u00a0leveraging leadership: a new way of looking at growth<\/a>\u00a0 |\u00a0\u00a0are you creating a sustainable firm?<\/a>\u00a0 |\u00a0\u00a0don\u2019t confuse marketing with a true growth strategy<\/a>\u00a0 |\u00a0\u00a0overcoming four imaginary barriers that limit cpa firm growth<\/a>\u00a0 |\u00a0\u00a0how firms unleash the power of diamonds, cash cows and fat cats<\/a>\u00a0 |\u00a0\u00a0how smart firms use market research<\/a>\u00a0 |\u00a0\u00a0got leads? get real. learn how to qualify big opportunities<\/a>\u00a0 |\u00a0\u00a0it\u2019s a new generation in lead generation<\/a>\u00a0 |\u00a0\u00a0at the best firms, growth is no accident<\/a>\u00a0 |\u00a0\u00a0four keys to success at seiler cpas<\/a>\u00a0 |\u00a0\u00a0how accounting firms are re-building their sales pipelines<\/a>\u00a0 |\u00a0\u00a0how to get started on ifrs in one easy step<\/a><\/p>\n video:<\/strong>the three elements of growth strategy<\/a>\u00a0 |\u00a0\u00a0defining the new business model<\/a>\u00a0 |\u00a0\u00a0the 3 hallmarks of the \u2018new accounting\u2019 business<\/a><\/p>\n yet beneath this familiar scenario, our profession is undergoing a seismic shift, one set in motion by changing market conditions, technological advances, demographic transformation, and other factors. as a result, much about the way we practice is being forced to change. that\u2019s certainly the case when it comes to growth.<\/p>\n jack welch, the former general electric ceo turned guru, urges business leaders to \u201cchange before you have to.\u201d that\u2019s advice accounting firm partners should heed.<\/p>\n the traditional growth paradigm in public accounting isn\u2019t just showing a little wear and tear, it\u2019s close to collapsing under the weight of outdated assumptions and strategies. the marketplace of today is complex and only growing more so. an accounting practice\u2019s growth strategy requires more than an old-school, boots-on-the-ground approach that relies on traditional referral sources to build business.<\/p>\n for years, ideal market conditions meant firms didn\u2019t have to go far\u2014or do much\u2014to bring in business. but that\u2019s no longer the case. today\u2019s accounting marketplace is sophisticated and fiercely competitive, with low margins and deflated pricing.<\/p>\n old-model, new-model \u2013 what\u2019s different?<\/strong><\/p>\n our traditional growth model has featured:<\/p>\n the new model for growth is vastly different:<\/p>\n in addition to market complexity and the need for more sophisticated approaches, another key dynamic is the large numbers of baby boomer-era partners who are retiring or planning to in the near future. up and comers are taking over our firms, and they are much more tech-savvy than their elders. they generally don\u2019t have limitations in their thinking about geographic borders the way baby boomers do.<\/p>\n and this leads me to another big shift in the marketplace, taking place at the intersection of geography and technology. while markets have traditionally been defined by local geography rather than by buyer group or industry, this place-based view often no longer applies.<\/p>\n technology gives us the ability to serve clients in real time in any country in any time zone. in the past, your competition was defined by your zip code. today many of the few hundred thousand cpas worldwide could be competing for your clients\u2019 business. the result is a shrinkage in the size of our local markets. and market size is the number one indicator of good market conditions. many of those markets are starting to look like swiss cheese, with far-flung competitors cropping up and eating holes in what would traditionally be our prospective buyer markets.<\/p>\n a clothing manufacturer in beijing can select an accounting firm in boston because the boston firm has carved out a successful niche in the ready-to-wear market. and working with the boston firm is no harder than what working with the firm next door used to be. capabilities such as cloud-based applications, portals, mobility, skype, and social media provide real time, shared access to clients, colleagues, and financial information.<\/p>\n so now what?<\/strong><\/p>\n in view of this altered landscape, our approach to growth must shift as well. banker breakfasts and lawyer lunches are no longer enough. sustainable growth demands building an empowered leadership team that can drive growth from every area of the firm, creating a profitable high-growth legacy in the process.<\/p>\n partners have traditionally prized the deep, personal relationships they forge with clients. it\u2019s been an effective way to grow an individual book of business, but it\u2019s no longer enough for sustainable long-term firm growth. we need to replace outdated individual tactics with a strategic, leader-driven approach. the game today is football, not golf. winning requires individuals working as a team to achieve a common goal, not a group of \u201cteammates\u201d working in silos to achieve individual goals.<\/p>\n in today\u2019s competitive environment it\u2019s risky at best for one \u201clone ranger\u201d partner to know what nobody else knows and to sell what nobody else can sell. individual hunters got the job done back in the days of less complexity and simpler markets. but to make the turn, those hunters must transition to become leaders of the hunt, getting other hunters aligned with their vision, especially if the other hunters would rather sit around the campfire than charge forward.<\/p>\n with geography no longer in play (i.e. the local cpa gets the local business) firm leaders need to rally their hunters around a target, such as specific buyer groups or industry niches. failure to do this leads to everybody hunting everywhere and anywhere without focus, risking shooting one another and bringing in little in the process.<\/p>\n many firms inherently know that specialization is important. the reason is that we are in a mature market. many years ago the boston consulting group discovered the product life cycle concept, which is the foundation of product management. they explained that early markets are often generalist one-size-fits-all. but as markets mature and competition increases, in order to sustain growth and profitability, organizations need to morph into specialization or get stuck in a price commodity-cellar with ever decreasing profits. but while most firms have adopted specialization at some level, most of them have gotten stuck with one foot in the traditional, generalist world and the other in a specialist world.<\/p>\n getting unstuck<\/strong><\/p>\n the pursuit of growth must be as sophisticated and disciplined as the delivery side of your operation, with a robust process that includes identifying roles, goals, processes, resource deployment, profitability, etc. all of this activity must be driven by empowered leadership.<\/p>\n i frequently get sos calls from panicked firms. \u201cgale, we need you! competition is fierce, and we\u2019re getting hammered on pricing. help us increase our marketing so we can grow.\u201d the first thing i tell them is that marketing does not grow anything. growth is a function of three necessary and integrated disciplines\u2014marketing, sales and product management. and it must be consciously and continually led.<\/p>\n many years ago, building upon the growth principles used in the most sophisticated corporate environments, i designed the practice growth model. although somewhat foreign to accounting, it has been common in the corporate world for decades. while cpa firms had their noses to the grindstone honing services, corporate america was advancing its business and growth processes. in the words of ibm ceo ginni rometty, \u201cit\u2019s not about product innovation so much anymore as about innovating business models, process, culture and management.\u201d<\/p>\n the engine behind sustainable firm growth is leadership, which gains momentum from four levers\u2014<\/p>\n let\u2019s take a closer look at each of those four levers.<\/p>\n 1. market strategy leadership.<\/strong><\/p>\n strategy trumps tactics. that\u2019s why the most cutting edge growth-driven firms are changing the role of the marketing director. heretofore, marketing has been viewed as a tactical machine, tasked with activities such as printing brochures and sponsoring events as the firm strived to gain visibility and market position. but the most advanced firms know that visibility doesn\u2019t grow anything. it\u2019s just one piece of a far broader mission \u2013 growing the firm. this requires a leader tasked with leading and supporting firm-wide growth, not just marketing. you\u2019ll see people in these firms with titles such as director of practice growth or chief growth officer. it\u2019s reflective of a much broader, strategic mission to grow the firm. this includes guiding and supporting service line and industry leaders to discover their unique growth strategies. the strategies include innovation of services, matching these innovations to specific industries and buyer groups, and helping partners discover and align their interests with distribution channels \u2013 ways that buyers find us in great quantities.<\/p>\n in years past, it was good enough to find one buyer at a time. now it\u2019s imperative to up the objective to a strategic level and find buyers in great quantities. a perfect example is a firm with a dental niche. the niche leader identified a major provider of dental equipment, and upon interviewing the vp of sales discovered that achieving his sales goals could be enhanced by pointing out accelerated depreciation benefits to the dentist. our niche leader was asked to join the equipment provider\u2019s sales people all over the region in meetings with dentists. this led to the firm finding dentists in great quantities through this distribution channel, and alignment of their interests with ours.<\/p>\n 2. industry\/buyer group leadership.<\/strong><\/p>\n specialization, not generalization, fuels sustainable growth in mature markets. rather than owning a book of business, or focusing on merely becoming famous in a market, leader-driven growth requires that partners instead own a segment of the firm\u2019s revenue and profitability, becoming responsible (and accountable) for specific industries\/buyer groups, also known as revenue segments.<\/p>\n 3. service line leadership. <\/strong><\/p>\n similarly, in high growth firms, service line leaders own revenue segments, and the associated firm-wide revenue, and profitability for their service line.<\/p>\n industry\/buyer group leaders and service line leaders have two main responsibilities: the overall strategic direction, and the financial health of their segment. it\u2019s the same principle that operates in large corporations where the business unit president is accountable not only for the growth of the top line and the health of the bottom line, but also for the business unit\u2019s strategic direction \u2013 a task intended to ensure a bright future.<\/p>\n industry and service line leaders study market conditions and calculate the impact of shifts in conditions. they understand their targeted industries and buyer groups and what they want to buy. they become experts in identifying the services that will meet the needs of a particular market segment, then adding innovation to distinguish those services. they identify and align interests with the most powerful distribution channels.<\/p>\n segment leaders inspire and motivate their teams. they operate on the strategy level and teach their teams the tactics to achieve the segment goals. they care more about financial results than about boosting market visibility. they care about segment growth, not just service delivery. finally, they understand that growth results in more work far more reliably than more work results in growth!<\/p>\n 4. large opportunity leadership. <\/strong><\/p>\n large opportunities are most successfully pursued through a robust pipeline management process led by a passionate managing partner. this involves identifying and driving significant opportunities and funneling them through a firm-wide pipeline.<\/p>\n a firm-wide pipeline process forces a regular review of all large, or strategically significant open and active opportunities, regardless of whether a proposal has been issued. the pipeline document, which is basically a spreadsheet, is reviewed during half-hour, bi-weekly virtual meetings with the entire partner group.<\/p>\n the pipeline document is succinct, but tightly constructed to ensure that no opportunities slip through the cracks and that there is no gap between what partners should be doing and what they are doing. every targeted opportunity is assigned a quarterback who manages the opportunity and reports on progress at the meeting. pipeline management is a proven and efficient process that requires more discipline than time.<\/p>\n inevitably, pipeline management reveals evidence of poor opportunity pursuit techniques. this enables the managing partner to direct interventions, which can lead to higher win rates, as well as develop opportunity pursuit skills among the firm\u2019s leaders.<\/p>\n an example of a poor opportunity pursuit technique is incomplete lead qualification. there are many reasons why this happens, such as lack of knowledge in lead qualification, lack of comfort discussing potentially sensitive topics with a prospect, lack of experience in persuading a prospect to reveal information, or just plain lack of practice. but the result is that critical information which informs a win strategy never comes to light. this ends up in surprises later such as decision-makers who pop out of the woodwork, or incumbent providers who are tossed out of the running, but beg forgiveness for poor service, drop their price and re-secure the business.<\/p>\n pipeline reviews lead to sharing of best practices among partners, increasing the pursuit skills of all team members and higher win rates.<\/p>\n what can you expect?<\/strong><\/p>\n if your firm opts for leader-driven strategic growth, it will undergo a transformation and become unified in purpose. this approach aligns firms for a more robust and profitable future, one whose success is firmly in the hands of next-generation leaders well prepared by their senior colleagues.<\/p>\n what else can you expect? when you approach growth strategically, you:<\/p>\n it\u2019s complicated.<\/p>\n the trend toward increasing market complexity is here to stay. if anything, forces including firm succession, technology and competition will grow stronger not weaker. but by relying on a strategic, leader-driven approach your firm can stand against the forces of change to grow profitably and sustainably for the long term.<\/p>\n \u201cteamwork makes the dream work,\u201d as the saying goes. if your firm has the desire to make the transition from a group of individual players to a cohesive, mission-driven team, you\u2019re already on your way. becoming a growth-centric firm is a marathon, not a sprint. it\u2019s led by nimble, sure-footed leaders who motivate and inspire those from every function within the firm.<\/p>\n leveraging leadership to energize growth is a new state of mind for many firms. yet, in my experience, it has proven equally powerful for firms of all sizes.<\/p>\n <\/p>\n
\ncrosley + co.<\/a><\/em><\/p>\n![\"goprocpa.com\"](\"https:\/\/4f2bur4nuye2cgakm2rm61qk-wpengine.netdna-ssl.com\/wp-content\/uploads\/2016\/08\/yellow_key_clip_art-e1375897299811-36p-hi-1-e1470686574894.jpg\")
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reprinted with permission from accounting today.<\/span><\/h6>\n
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