Why CPA Firms Are Growing Or Dying – With No In-Between

Why CPA Firms Are Growing Or Dying – With No In-Between

knowledge transfer in progress at a CPA firm

There should never be a time that a CPA firm isn’t thinking about its growth plan. No matter what kind of times we’re living in, you’re either growing or you’re dying. That may sound harsh or extreme, but it’s a mindset that managing partners would be wise to consider in their approach. Let’s take a closer look at some of the key indicators of where a firm lands on that spectrum – growing or dying – and what can be done by your firm to either inspire continued growth even further or stem the tide of decline.

There’s a reason firms grow slowly – or not at all.

Before we can diagnose a firm as declining, pinpoint a solution and suggest how to implement it, it’s essential that we understand where that pattern of decline originated within the organization. Then we can identify the firm’s “warning signs” before it trends downward further.

Firms that experience slow growth:

  • Struggle with having a good strategy for growth, such as how Partners are deployed.
    How are we prospecting for new work? Will we be working with referral sources? Will we be teaming together in a complementary way? These and other questions are vital to learn the answers to. As Partners are likely very good at serving the firm’s existing clients, how can we leverage these existing client connections to expose them to more of the firm’s services?
  • Can’t hold top people, including Partners, accountable for growth or lack of it
    Be honest here. Can your firm be willing to look at each Partner’s book of business and have some tough conversations with even the best Partner if they aren’t performing? That’s easier said than done, but it may need to happen for the good of the firm. We don’t mean asking Partners to leave the firm, but rather to ask, “What can I do to take certain things off that Partner’s plate?”
  • Lack the patience and focus on doing ongoing training on client service or business development
    One class of only a few hours does not result in a transformed individual. That’s fairly unrealistic. A firm genuinely committed to learning and development in its people knows it takes a program for lasting impact.
  • Wait for the opportunity to come knocking instead of getting out and finding it. Our hours in the day, week, month and year are finite.If you just take the passive approach, which seems to be what many firms do, you’ll do little more than sit back and wait for RFPs to come. Any day now. Really.

In contrast, firms that are growing understand that every Partner has to have an active role in growing the firm. It’s not someone else’s job. It’s every Partner’s job.

PSG’s Jim Brasher speaks to why knowledge transfer means everything to propelling a CPA firm to a new level.

When we talk about growing a CPA firm, that isn’t confined to building and expanding relationships outside of the firm. Growth also comes in the form of internal knowledge transfer from Partners to the rest of the team.

Let’s face it: This is a people business. It always has been. Accounting firms may not have R&D in the traditional sense, but they often have a lot of intellectual capital. The challenge for so many firms is to share that knowledge from the Partners on down (stories of successful client engagements, technical expertise) more frequently and disseminate Partner knowledge across the entire organization.

For example, one Partner based in New York is working on a client issue today that they overcome with a solution. Tomorrow, a different Partner based in Chicago happens to be working on that very same issue. How does the Chicago Partner get access to the advanced intellectual capital and learn the proper steps forward?

Some firms have done an excellent job of knowledge transfer by highlighting problems, solutions and best practices more efficiently, connecting team members across geographies to one another as resources. In our current day and age, that approach couldn’t be more essential.

Beyond practical learning from the top down and outward, knowledge transfer can also occur in more formal educational training.

Education and Training: The X Factor For Growth

A firm that wants to be closer to “growth mode” versus “dying mode” has to invest in a high level of education and training. Doing so sends a clear message throughout the firm that you are investing back into your team and seeing them as part of the long-term growth picture. In the best of times or worst of times, you can learn a lot about a firm based on how they want to educate and train their people continually. It’s not a one-time event. It’s a real commitment to their success.

A fantastic place to start is when your firm is striving to teach more team members how to deliver superior client service: What it looks like, what fuels it and the consistent behaviors it requires. Professional Strategy Group has just the course to get your firm on the same page on this topic: The Valued Advisor and Superior Client Service.

This session enlightens your people on the strong link between superior service and being viewed as a valued advisor. As a result, a host of powerful results can follow, including increased client satisfaction, client referrals, additional revenue and career advancement opportunities. To learn how your firm can put some real distance between others by transforming clients into advocates – and create a culture of greater knowledge transfer, call Professional Strategy Group today at 312.860.0873 about this course and others in The PSG System.