Why is Executing the Firm Strategic Plan so Challenging?
“To implement real change, to drive people to accomplish something truly complex or difficult or dangerous – you can’t make people do these things. You have to lead them.”
— Jocko Willink
Working with hundreds of companies and accounting firms, it is always amazing how many leaders are comfortable letting their firms wander down the road with no defined and agreed upon destination – no shared vision of the future. Even a bit more amazing is when leadership invests the time and resources to develop strategies at annual partner retreats only to allow the lack of accountability to stifle any real progress towards implementation. When firm leadership reflects a lack of commitment to developing a strategic plan and not leading the execution of strategy when a strategic plan is developed, that is a failure of leadership.
What is the role of the firm leader in developing a sound strategic plan and providing the strategic leadership to achieve successful execution of each strategy? Let start with what strategic leadership is not:- It is not about achieving this year’s budget – that is what management is about.
- It is not about telling everyone what the strategies should be.
- It is not about allowing the firm to operate year after year with no clear future vision and no clear roadmap (strategic plan).
- It is not about allowing a firmwide lack of accountability for results.
- Finally, it is not about allowing a culture of “siloes” and “my book”.
Presented below are the obvious but not easy things that a managing partner needs to do in today’s world of public accounting to be viewed as an effective leader who sits on top of a firm that is not in denial:
- Walk and talk both the vision, mission and strategy of the firm. Lead by example. “Do as I do, not as I say”.
- Create an environment that breeds trust, persistency and consistency.
- Shepherd senior partners and potential all-stars.
- Create a firm-first (our clients vs. my clients) culture.
- Be open to service diversification — move away for the traditional accounting firm model to a professional services firm model.
- Address ineffective partners on a timely basis.
- Realize that size (with quality and profits) matters and explore a merger or two if that is in the long-term best interests of clients, staff and partners.
- Deliver on the client promise of being trusted advisor.
- Create goal setting, accountability and discipline — first and foremost with the partners and then with the staff.
- Drive industry specialization, the undisputed vehicle to drive client distinctiveness and value.
- Implement a partner compensation plan that is fair and equitable, incentivizes high performers and potential all-stars, and avoids “sprinkles”.
- Get value from non-billable time.
- Create a balanced approach, that’s neither too lenient or too overbearing, to partner and staff utilization.
- Insist that a strategic plan may require a “no” when an idea doesn’t conform.
- Develop an effective “farm system” for talent particularly future partners.
- Gain market permission from the gate keepers such as investment bankers, attorneys, and bankers that will enable you to move upstream with clients.
- Grow for strategic purposes not simply for volume.
- Require the proper mix of clients or marquee clients (credential builders) and other clients that help pay the rent and train the staff.
- Have corporate governance and operating models that work for the overall firm.
- Always have the desire (and the ability) to invest in the future.
- Help partners and staff realize that quality work doesn’t necessarily mean quality service.
Too many leaders and partners see strategy as a waste because in too many firms, retreat after retreat, strategies are discussed and agreed to and then post-retreat – nothing ever changes. Firm leaders and partners would tell me time after time that they just have no energy for more strategies since nothing ever changes. In the end, strategy just becomes wishful thinking. That is a failure of leadership.
In my soon to be published book – “Leading from The Edge – Creating a Standout, High-Performing Firm”, I posit that a great Edge leader has the ability to motivate, inspire and focus partners on a shared aspirational future vision driven by a strategic plan built on shared responsibility for the successful execution of each strategy. Seems straight forward so why is it so difficult. One reason is the strategic planning process itself and the other, much more critical, is the lack of strategic leadership. Let’s start with a question - why do firms spend more time and resources on the annual budget than a roadmap (strategic plan) to create a transformative firm driven to exceptionalism?
- Most leaders and partners were never trained in future, out-of-the-box thinking given most of their time is focused on historical results. Thinking outside the box only matters if leaders can imagine a new box.
- Complacency – when leadership allows the past to shape the present, it’s too easy for every partner to become complacent and to resist strategic planning. It is impossible to re-imagine a future if all you ever do is look in the rearview mirror.
- Leadership fails in their responsibility to build consensus in creating strategy and instilling a shared responsibility for the successful execution of strategy.
- Leaders fail to hold individuals accountable for results. A culture lacking accountability fosters failure in execution of agreed upon strategies.
- Leaders allow a culture of “my book”, “my client” to permeate the firm versus creating and driving a culture of “one-firm” without siloes. Changing a partner’s attitude from “me” to “us” is a challenge that firm leadership needs to own if there will be any success in execution of strategy.
In Conclusion
It is one of the firm leader’s key responsibilities to address the above 5 blockages if there will be any success in strategic planning and execution. So, what steps should leadership take?
- Helping partners become better out-of-the-box thinkers and more comfortable in envisioning a future that is different from the past and perhaps more difficult. It takes leadership that recognizes you can’t create that comfort by telling everyone it is ok, but by letting everyone understand that sometimes it takes courage to see a different future that is not based on what they know. “Don’t be intimidated by what you don’t know. That can be your greatest strength and ensure that you do things differently than everyone else”
– Sara Blakely - Complacency is created by leadership that fails to inspire and motivate everyone to reach beyond their past performance and to have the courage to take chances. Firm culture needs to reflect support for imagination, creativity, and finding new solutions. Culture and leadership that support and reward true entrepreneurialism is the antidote to complacency.
- Strategy and commitment to execution is not the leader’s responsibility. Guiding everyone and building consensus and shared responsibility is. A leader must be the coach on the sidelines allowing others to succeed or fall short cheering on the successes and coaching when needed.
- Leaders need to start by holding themselves accountable for their actions, achievement against goals, and commitments made. Leaders can’t hold others accountable if they themselves are not accountable. Leaders need to communicate and show that accountability is a personal choice and not something that results from a process. Accountability is everyone’s responsibility.
- Creating a “one-firm” expectation is absolute and if leadership fails in this, achieving a future vision that is much different from the current state will fail. Leadership must make it clear to everyone that shared vision and shared responsibility for success only have a life when there is a shared commitment to working as one-firm, one team with everyone in the same boat rowing in the same direction.
