Section 3
Leading Strategy

“Hope is not a strategy.”

~ RICE PAGE

Once you’ve created your own foundation for leadership, and you’re working with empowered people and teams, where do you go? To put strategy and its components in context, we need to look at vision, mission, and values. Successful accounting firms formally and strategically plan their future. Firms may create a vision for the next year, but more typically, a firm will look 3–5 years in the future, and some extend their vision to 20 years.

In the three chapters that follow, we will closely evaluate the benefits of vision, mission, and values. These three elements form the basis of the leading strategy level in the pyramid structure of this book.

Mission permeates everything we do with strategy, but it’s not the starting point. Values define our firm, and mission touches and is bounded by our values. Mission connects the present and future: our vision. Our objectives should align with our mission and be constantly compared with the mission to ensure that we’re staying on track toward our vision and within the bounds of our values. Mission and values exist both today and in the future, whereas the vision is not truly in the present.

To determine where a firm is going, leaders need to exactly know its present state. Only then can the leadership determine where it wants to go and how it will get there. When documented, this becomes the strategic plan. The following is an overview of these three building blocks that make your firm and strategy unique.

Vision (Chapter 11)

Vision defines the desired or intended future state of an accounting firm in terms of its fundamental objective or strategic direction. Vision is a long-term view, sometimes describing how the organization would like the world in which it operates to be. For example, a partner group might have a vision to double their revenue within five years.

A shared vision provides a starting point for business decisions, firm operations, marketing, technology, and finance. We have found that firms that have no central vision but are essentially organized to share overhead differ significantly from firms with a vision shared by all stakeholders (leaders, partners, employees, families, clients, and communities). The following table illustrates the differences between a firm that operates as a shared overhead firm and one that operates with a shared vision.

Shared Overhead Firm Versus Shared Vision Firm

Mission (Chapter 13)

Mission succinctly defines the fundamental purpose of an accounting firm, describing why it exists and what it does to achieve its vision. A mission statement answers the question, What do we do? For example, Clifton Gunderson LLP’s mission is “Growth of our people, growth of our clients, all else follows.”

Values (Chapter 12)

Values define what the firm stands for, the kind of people that you want to employ in your firm, the actions that you want them to take, and the results that they should get in the marketplace. Many firms will have 3–10 core values, along with a set of behavior principles, that they follow.

Some values that you’ll see among accounting firms include a commitment to community service, integrity, teamwork, excellence, great client service, spiritual and physical well-being, having a positive workplace, respect for individuals, and lifelong learning, just to name a few.

Strategic planning cannot foretell exactly how the market, economy, competition, and clients will evolve and what issues will surface in the coming days or years. Therefore, strategic innovation and regular adjustment of the strategic plan have to be acceptable for a group of owners to thrive in the turbulent business climate. Even an airplane on a well-charted course from New York to Paris continually adjusts its direction as it flies through the buffeting winds and weather systems.

A successful firm’s initiatives are constantly changing because of all the variables occurring in the real world of implementing strategy. Although you may launch your intended strategy through a series of initiatives, you will discover that the environment is constantly changing, and some initiatives work better than others. Initiatives that falter might be abandoned. At the same time, you will discover emergent strategies that will propel you along the way toward your vision more surely. With the right leadership, you will arrive at your destination or vision.

How Vision, Mission, and Values All Fit Into Strategy

In my experience, a firm without a vision simply floats along aimlessly, vulnerable to the winds of the economy and competition. Employees do not fully engage, clients may be satisfied but not loyal, and leaders and partners don’t reach their full potential. With a clear, successfully communicated vision that everyone embraces, leadership and management have a clear focus when making decisions, and employees feel that they are part of something bigger than their individual positions.

Neal Spencer, former CEO of the megaregional firm BKD, LLP, in Springfield, MO, discusses his work on visioning this way:

In my role, I focus on leading us into the future, helping us seize opportunities and avoid major problems. For me, one of the major distinctions in leadership and management is that I can lead and think strategically, and my chief operating officer and professional practices partner can focus on managing the day-to-day business. Strategy helps us get very specific about the steps we will take toward our vision. It helps us answer what we will do to achieve our vision and be guided by our values.

Which comes first, the mission or vision? That depends. If you have a start-up firm, new niche, or plan to reengineer your current services, then the vision will guide the mission statement and the rest of the strategic plan. If you have an established business where the mission is established, then many times, the mission guides the vision statement and the rest of the strategic plan. Either way, you need to know your fundamental purpose—the mission, your current situation in terms of internal resources and capabilities (strengths and weaknesses), and external conditions (opportunities and threats)—and where you want to go: the vision for the future. It’s important that you keep the end or desired result in sight from the start.

Next Steps: Goals and Objectives

Once you have developed your vision, mission, and core values, you can derive the goals and objectives needed to achieve your vision.

Goals

Goals are general statements of what you want to achieve, so they need to be integrated with your vision and mission. Examples of strategic or tactical goals include the following:

▴ To improve profitability by 15 percent

▴ To increase efficiency by 3 percent

▴ To capture a bigger market share in our construction niche

▴ To provide better client service and increase our client loyalty scores to 4.6

▴ To improve employee training and reduce turnover by 10 percent

A goal should meet the following criteria:

▴ Suitable: Does it fit with the vision and mission?

▴ Acceptable: Does it fit with the values of the firm and employees?

▴ Understandable: Is it stated simply and easy to understand?

▴ Flexible: Can it be adapted and changed as needed?

Make sure that the goals are focused on the important aspects of your firm (types of clients served, geography, financial metrics, and so on). Be careful not to set too many goals because you run the risk of losing focus. Also, design your goals so that they don’t contradict and interfere with each other.

Objectives

Objectives are specific, quantifiable, time-sensitive statements of what is going to be achieved and when it will be achieved. They are milestones along the path of achieving your goals. Examples of company objectives are as follows:

▴ Improve utilization from 60 percent to 62 percent and realization from 90 percent to 95 percent.

▴ Gain one new construction client per quarter.

▴ Visit each partner’s largest 10 clients once every 6 months when not working on client matters.

Objectives should meet the following criteria:

▴ Measurable: What is the measurement of success?

▴ Commitment: By what date will this be complete? What are the resources dedicated to achieving this objective?

▴ Ownership: Who are the team leader and members of the initiative task force?

The Role of Strategies and Initiatives

Strategies are statements of how you are going to achieve something. In a sense, a strategy is how you will use your mission to achieve your vision. A strategy is a series of actions or initiatives designed to achieve the goal. Goals and objectives provide milestones for measuring the success of the strategy in achieving the vision.

You can use several business analysis techniques in strategic planning, including SWOT analysis (strengths, weaknesses, opportunities, and threats) and PEST analysis (political, economic, social, and technological). They can help you assess the present state of your firm, as well as identify forces that might affect your go-forward strategy.

Initiative or action plans or tactics are statements of specific activities used to achieve an objective. You need to identify specific individuals who have the responsibility for implementing the initiative plans, along with a timeline for completion.

Example Plan

The following is a sample strategy, goal, objective, and action plan for a typical accounting firm. Note that the components of the plan cascade from the vision and mission. Goals are statements of what needs to be done to implement the strategy. Objectives are specific milestones for meeting the goal. Action plans are specific actions for reaching the milestone.

Vision

To be a $25 million revenue firm (or division) with dominance in the construction, real estate, and health care industries.

Mission

To help our clients obtain and use their financial resources more wisely.

Strategy

Have two of our partners become “famous people” within the construction industry niche that we have chosen to dominate.

Goal

Become number 1 or number 2 with every potential “A” client within the general contractor and road builder subniches of the construction niche within five years.

Objective

To propose on at least 10 potential clients in each subniche each year, win at least 4 of the 10 proposals, and maintain 100 percent client loyalty with the present clients that we have.

Action Plan

Form a revenue team around each niche. Identify all the potential “A” clients within our geographic markets. Devise a personal contact plan to interact with each one. Become active in each trade association where these prospects are active. Prepare an annual financial survey of some type in each industry segment, so that we can have annual contact and provide value. Speak at trade shows and industry meetings at least twice per year. Prepare some type of regular correspondence into each niche.

In the chapters that follow, I will explain how many different firms approach vision, mission, and values. We’ll discuss the benefits and barriers to all these vital elements, and I’ll give you some step-by-step approaches to their development in your team or firm.