Every year, the NFL season begins with 32 teams and only two teams get to play in the Super Bowl. What separates the good from the great teams, and what made the Los Angeles Rams and the New England Patriots the two elite teams this year? The difference is that they were skilled at avoiding common pitfalls in their team structure, leadership, and implementing strategy. Similarly, in the public accounting environment, in order for firms to reach elite status and become “winners,” partners need to overcome common pitfalls, including:
- Believing that a firm (of any size) can be successful in the long-term without strong leadership at the managing partner level.
- Thinking that it is acceptable to fail at implementing action items from annual retreats because the partners are too busy and that the tasks at hand will eventually be accomplished.
- Not disengaging clients with very low realization rates and then hiring more staff to work on these clients during the busiest time of the year.
- Sustaining an analysis-paralysis type of culture (no sense of urgency) when it comes to making important and tough decisions that impact the firm’s future. Or, continuously procrastinating and holding off making time-sensitive decisions until the next partner’s meeting or retreat.
- Running the practice day-to-day as a preferential strategy in lieu of developing a strategic plan for three to five-year intervals with partner accountability for implementing the plans.
- Experiencing heightened client-fee sensitivity and competition with traditional commodity type services, but not developing or acquiring value-added and solutions-oriented services to offer to clients and the marketplace.
- Blaming the marketing director for slow revenue growth when the partners are not successfully implementing their personal practice development plans and are not truly held accountable for their lack of new business efforts and results.
- Continuing to promote staff who have no chance of becoming equity partners and creating a top-heavy firm that is succession challenged.
- Paying staff annual bonuses that they consider part of their annual compensation rather than linking their bonuses to performance objectives and achieving personal goals.
- Using partner compensation criteria/structure that primarily rewards “book of business” and places little emphasis on initiatives that will benefit the future success of the firm.
- No succession planning/transitioning and no formal grooming of the next managing partner in firms where the current managing partner is nearing retirement age.
- Missing opportunities and not investing in the firm’s future by passing on talented staff or partners who have niche/specialty practice area expertise when they become available.
- Assuming that the past success of a firm guarantees success in the future.
As we look back on the Super Bowl, keep in mind that leading and managing an accounting firm is like coaching a football team — you play the game to win it, not just to play it.