How Do You Know Your Growth Is Sustainable?
Reprinted with permission from Accounting Today.
I’ve talked a good deal about sustainable growth lately. And I’m often asked how I know if a firm can achieve it. The answer is to look for the common indicators. It’s relatively easy to know if your firm is growing. But how do you know that the growth you’re experiencing is sustainable? What are the signs that it will last beyond this year?
Firms that are consistent performers demonstrate common elements of sustainable growth. Those elements are integrated seamlessly in the best firms. Here’s what I look for.
Element #1: Leader Driven
Sustainability starts at the top, with a structure that recognizes that lasting growth is based on shared pursuits, not on individual contributions. The managing partner is the point person when it comes to firm growth. But the MP is only as effective as his or her team leaders. Leader-driven growth includes the key positions discussed below.
Element #2: Segment Ownership
In an environment of integrated growth, industry and service line segments are owned by partners who are responsible for the strategic direction and financial health of each segment. Segments can include traditional service lines like audit or tax, or any other niche, buyer group or industry specialty. Importantly, everyone in the firm knows who’s in charge.
The most evolved firms provide incentives for segment leader performance. Segment ownership requires significant commitment and effort; incentives can help ensure that the leader post is taken seriously.
Element #3: Strategy before Tactics
Segment leaders responsible for the financial direction and health of a segment create and deploy strategy around that segment. For example, it’s less about going to lunch with lawyers (tactical) and more about ensuring that services are precisely aligned with the needs of the people and businesses being served (strategic).
Element #4: Opportunity Pursuit
Another indicator of sustainable growth is the presence of a pipeline management process. This is an orderly, thoughtful approach to pursing large opportunities. It is directed by the managing partner, who leads a bi-weekly conference call to assess current opportunities. By its collaborative nature the pipeline process creates positive peer pressure. It keeps everyone working off the same page and focused on the same results.
Element #5: Team Play
When it comes to the game of growth, think football (a team focused on a common result) rather than golf (individuals vying for the top spot on the leader board).
Team play is a direct result of strong, strategic leadership. It is characterized in two ways. The first is by the presence of actively engaged segment leaders, each using an effective team to achieve common goals of evolving ongoing strategy and achieving financial health. The second is by the evidence of teams working together to develop and land large opportunities. These are in contrast to the notion of “lone rangers” out there doing their own thing, pursuing their own book of business or new prospects.
Element #6: No More Marketing Director
It’s common for accounting firms to have marketing directors. But at firms that are aligned for sustainable growth, you will more likely see a director of practice growth (DPG).
This individual’s purview goes beyond improving a firm’s positioning and visibility in the marketplace. In addition to marketing, the DPG leads and supports opportunity pursuit efforts, as well as industry and service line leader initiatives.
Within the marketing function, I look for evidence of a strategic approach such as innovation and alignment of interests with distribution channels into clearly defined buyer groups. This precedes typical marketing activities like event sponsorships and thought leadership.
It’s a sustained effort
Becoming a firm that embodies the elements of sustainable growth is a marathon, not a sprint. But it is a race well worth running at any pace. Know the signs that you’re on the right path. And once you get to the finish line, don’t stop running. It’s a race that never really ends.