IN OUR OPINION, PERSPECTIVE #54 — MARCH 19, 2018
(A Continuing Series for Leading CPA Firms)
WHY DO WE ACCEPT POOR NEW BUSINESS RESULTS?
“Growth is never by mere chance, it is
the result of forces working together.”
— James Cash Penney
The question to ask is why do so many firms accept poor performance from so many of their partners relative to growth and generating revenue. There isn’t a firm in existence that does not depend on constant growth to be successful and to generate enough profit to pay its staff and partners well. Yet, so many firms accept the old bell-shaped curve argument that they are winning if just 20% of their partners are good at generating business. Imagine if every partner was contributing to growth from generating new business. It’s not impossible, not even hard if the “forces” work together coupled with effective leadership.
The bottom line is that every partner in every firm should be held accountable for generating new business every year. New business can come from totally new clients or expansion of revenue from existing clients. In addition, not all partners will be created equal and partners will achieve different, but growing levels of business development success if you follow a model similar to that described below.
Growth in too many firms is almost anecdotal in that it is by chance that growth occurs not by specific strategies, goals and expectations. In Our Opinion, the forces that need to work together to create a growth culture are:
Lack of skill – selling is not a natural skill that somehow every partner has:
We all know that partner who can sell snow in the winter, that partner where success in sales is a given and it’s not even a challenge. Unfortunately, that partner is the exception – too bad we can’t clone him or her. Far too many partners lack the selling skills to be successful in generating new business and firms for the most part do nothing to address that skill gap. Networking, building relationships and then generating new business is a process and a skill that everyone can learn and be successful at. Training is the first step. Every firm should have a robust and continuous training program for partners and senior staff to teach the skills of networking, building relationships and generating business for the firm. It works and if you think about it, you can’t be successful at anything if you don’t have the skills so let’s tackle that and get all your partners and senior staff the skills needed to be successful in developing business.
Lack of confidence – with the lack of skill comes the lack of confidence:
No partner wants to be put into a situation where they are not confident in their abilities. So many firms set goals for their partners for new business and simply expect the partner to figure it out and deliver. They never do and firm management can’t understand why. Part of the answer is in building the skills, training. But there are other steps to consider. Mentoring – pairing partners who have trouble with new business development with partners who are good at it. Sales Clubs – establishing sales groups comprised of no more than five (three partners and two senior staff) who meet as a support group to help each member get better at sales. Sales experience – making sure that a partner weak in business development goes on sales calls with a stronger partner as a team to see success in action. Targeting – implement a sales targeting program for partners who are weak in business development. Giving partners a defined list of “targets” along with the way to successfully implement a target market program will build confidence since done right, each partner begins to achieve success and nothing builds confidence more than success.
Lack of accountability – goals or expectations without accountability is like running a marathon without training – just does not work and it is painful:
If there is no accountability for results, no matter how many times at partner meetings or partner evaluations a partner is told they must generate business, there is no change in behavior or results since the lack of real accountability leaves the partner thinking it’s not really that important. Accountability needs to be based on agreed upon goals and coupled with quarterly or monthly meetings with each partner to evaluate results against goals. These meetings also provide a “coaching” moment to help the partner evaluate what they are doing, where they need help, what the firm can do, etc.
Lack of consequences – you cannot change behavior or therefore outcomes if there are no consequences for ignoring business development in the first place:
All partners need to understand that there are three things that each must do to add value to the firm and therefore make themselves valuable; (1) excellent client service; (2) train and mentor staff; and (3) generate business for the firm. Each of these must be reflected in partner compensation in order to clearly establish the linkage between performance, expectations, results. Business development goals need to be established for every partner according to his/her current skill level and those goals should be stretch goals. Each partner must also understand how their compensation will be impacted by the results they achieve and then those consequences must become real based on what each partner actually achieves against their goal.
Lack of a road map – business development to be successful must be done within a well thought out road map to ensure that everyone is focused on the right stuff:
As with all other aspects of a successful firm, there needs to be a clear road map, strategic direction, that defines what the focus of business development should be (type of client, cross selling/expansion, industry, geography, services, economics). Absent a strong strategic road map for business development, every partner will go looking for what they think is needed versus defining what the firm needs right up front and focusing everyone’s business development efforts there.
Lack of leadership – Firm leadership must promote a culture that includes successful business development from all partners to drive the firm’s growth:
Leadership is about leading people where they want to go. A great leader takes people where they are not comfortable going. Variation of a quote by Roslyn Carter. But it says it all when we are talking about getting EVERY partner to be successful in business development. Every firm CEO must be the leader that can get the partners to move into the uncomfortable zone of selling and by fully implementing the other five points above, it will provide the firm and its CEO with the roadmap to begin to build a successful business development culture, great business development success and in so many ways a much stronger group of partners.
Implementing each of the five steps, will result in your firm achieving significant organic growth, year after year. It will also create greater teamwork and a real shared responsibility for growing the top line of the firm. Once successful with partners, this process should be moved down to senior staff so that they become good at business development BEFORE they become partners and create more effective future partners for the firm.
Tony Zecca (CPA and retired CohnReznick partner and National Director of the Advisory Group) is a ESPOSITO CEO2CEO consultant who is brought into client assignments when needed. ESPOSITO CEO2CEO, LLC — a boutique advisory firm consulting to leading CPA and other professional services firms on strategy, succession planning and mergers, acquisitions and integration is actively led by Dom Esposito, CPA. Dom, voted as one of the most influential people in the profession for two consecutive years by Accounting Today, authored a book, published by www.CPATrendlines.com., entitled “8 Steps to Great” which is a primer for CEOs, managing partners and other senior partners. In Our Opinion, is a continuing series of perspectives for leading CPA firms where Dom and his colleagues share insights, experiences and wisdom with firm leaders who want to “run with the big dogs” and develop their firms into sustainable brands. Dom welcomes questions and can be contacted at either email@example.com or 203.292.3277.