It’s playoff time in the NFL and teams need to avoid common pitfalls to get to the Super Bowl. We have come up with some common pitfalls we have seen in the public accounting environment that winning public accounting firms need to avoid.
- Believing that a firm (of any size) can be successful in the long-term without strong leadership at the Managing Partner level.
- It’s acceptable to fail at implementing action items from annual retreats because the partners are too busy and thinking that the tasks at hand will eventually be accomplished.
- Not disengaging clients with very low realization rates and then paying staff overtime 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/tough decisions that affect the firm’s future. Or, continuously holding off making time sensitive decisions to the next partner’s meeting.
- Running the practice day to day as a preferential strategy over developing a strategic plan for three to five year intervals with partner accountability for implementing the plans.
- Experiencing heightened fee sensitivity and competition with traditional commodity type services, but not developing/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 held truly accountable for their lack of new business efforts and results.
- Continuing to promote managers who have no chance of becoming an equity partner to non-equity partner status and creating a top heavy firm that is succession challenged.
- Paying staff annual bonuses every year that they consider part of their annual compensation rather than linking the 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 formal grooming of the next managing partner in firms where the current managing partner is nearing retirement age.
- The assumption that past success of a firm guarantees future success.
As we approach the Super Bowl in the NFL, keep in mind that leading and managing a firm is like coaching a football team—you play the game to win, not just to play it.