Reprinted with permission from Accounting Today.
When we think of innovation we typically think of a new product or service—something that didn’t exist yesterday that will make tomorrow better. Innovative offerings are essential to the portfolio of any growth-minded CPA firm. However, long term sustainable growth requires a far more comprehensive innovation in your growth model, the strategic blueprint that helps you get from Point A to Point B.
I can hear you asking, “Gale, we’ve got a solid strategic plan including mission, vision, values, and strategic goals. So why do we need growth model innovation? It’s a good question and I’ve got a good answer—market complexity.
For many years, ideal market conditions meant we didn’t have to go far or do much to bring in business. We had breakfasts with bankers, lunches with lawyers and cocktails with clients. Throw in a Rotary meeting and an occasional golf game and you had all you needed to grow.
But that charming simplicity no longer defines today’s business environment. As Dorothy famously advised Toto, “I’ve a feeling we’re not in Kansas any more!” The recession of 2008-2009 unleashed a number of forces that created a more complex marketplace. Among the most powerful of these are a surge in competition, a push toward specialization and increased regulation.
So how do you stay strong and continue to grow in the wake of these forces? You do it by leading with strategy, and resisting the urge to dive headlong into tactics (social occasions, meals with prospects and sales training programs). Leave this to others and focus your partner group instead on strategic growth.
News flash—the business model has changed
The approach I’m talking about is not revolutionary. In fact, it’s been common in the corporate world for decades. While CPA firms had their noses to the grindstone honing and innovating services, corporate America was advancing its business and growth-directed processes.
IBM chief executive officer Ginni Rometty put it like this, “For CEOs today, it’s all about achieving growth and efficiency through innovation. It’s not about product innovation so much anymore as about innovating business models, process, culture and management.”
So what does this new, innovative model look like in our profession? It has three hallmarks.
(1) It is driven by leaders not just individual effort. Rather than owning a book of business, certain partners transcend their role to owning a segment of the firm’s revenue. For example, Partner X is responsible for the growth, financial health and strategy of audit. Others champion particular industries or buyer groups and are similarly accountable.
(2) It is strategic, not tactical. The model gains its strength from its foundation in strategic growth, not from disparate activities and tactics. The growth model rests on three legs—services, buyer groups and channels of distribution – all identified with laser-beam precision. Marketing activities have their place, but the marketing director becomes a practice growth director, and focuses more on leading growth than just on marketing communications and branding.
(3) It is fueled by specialization, not generalization. It’s not enough to hang out a shingle and expect clients to walk through the door; sustainable growth requires specialization. But increased specialization will by definition shrink your local buyer group. The way to overcome that obstacle is to expand your geographic vision, using technology tools that let you find, communicate to, and serve prospective clients regardless of geographic borders or time zones.
Markets are complex and that trend is here to stay. But with a strategic approach on your side you can stand firm against the forces of change to grow your firm sustainability for the long term.