Strategic Planning and Goal Setting THE ROSENBERG ASSOCIATES LTD

Strategic Planningand Goal Setting

THEROSENBERG ASSOCIATES LTD.www.rosenbergassoc.com

The Rosenberg AssociatesMarc Rosenberg, CPA, President

23 years consulting to CPA firms

Consultant, author and speaker

700 client firms from coast to coast

Top 100 Most Influential People in Acting Profession – Accounting Today

- 7 consecutive years Named one of the most recommended CPA firm consultants by INSIDE Public Accounting

The Rosenberg Associates

1000 Skokie Blvd. Suite 555Wilmette, IL 60091

Phone: 847-251-7100Fax: 847-251-4622

marc@rosenbergassoc.com

Rosenberg is active with CPA firms:Retreat facilitationPartner compensation & retirementSuccession planningMergersStrategic planning Practice management reviewsPartner relations and conflict

Titles

1. How to Bring in New Partners

2. How to Negotiate a CPA Firm Merger

3. How to Operate a Compensation Committee

4. What Really Makes a CPA Firm Profitable?

5. Guide to Planning the Firm Retreat

6. Effective Partner Relations and Communication

7. Strategic Planning & Goal Setting for Results

Also known as “white papers”Also known as “white papers”

Our proprietary consulting Our proprietary consulting methods, handouts, checklists, methods, handouts, checklists, and intellectual capital are and intellectual capital are captured in each of these captured in each of these monographsmonographs

The Rosenberg MAP Survey – Accounting Today calls it “generally accepted as the barometer for CPA firm practice management.”

The Marc Rosenberg Blog

• Launch: April 2011

•Frequent posts about key CPA firm practice management topics

•Opportunity to stay on top of key CPA issues

•Subscribe to receive emails notifying you of new blog posts

Where Marc goes in his free time

Disturbing the Present“Challenging the status quo when

you have been successful is difficult. If you think you will be successful running your business in the next 10 years the way you did the last 10 years, you’re out of your mind. To succeed, we must disturb the present.”

Roberto Goizueta

ALL ORGANIZATIONS PLAN

TAKEAWAY

When organizations:• Create a vision• Reduce it to goals• Put both in writing• Establish accountability…they are more likely to achieve their vision.

Why CPA firms shun strategic planning

1.Not sold on it.

2.No time.

3.Affluence

Before getting started…

“Great organizations did not first figure out where to drive the bus and then get the people to take it there. Instead, they first got the right people ON the bus, got the wrong people OFF the bus and then figured out where to drive it.”

Jim Collins- Good To Great

Crash CourseStrategic planning

What is strategic planning?

The PROCESS of examining:

• Where you are now• Where you want to be• How you will get there

With strategic planning:

• Priorities defined• Proactive vs. reactive• Everyone pulls in same direction• The firm attracts committed people

Strategic Planning:3 Main Phases

1. Brainstorming 10%2. Goal setting 20%3. Execution 70%

Extra credit: Create core values

Two Day Retreat

Day 1 - Morning BrainstormingCreate vision

Day 1 afternoon Day 2 morning

PrioritizeFirm wide goalsDrill down

Day 2-early afternoon What’s going to make us do it?

Day 2 – mid pm Accountability

Day 3 – late pm Core values (advanced)

After the retreat:•Assign goals to individuals•Monitor progress•Execute

Strategic planning is a journey, not a destination

“When you cometo a fork in the road, take it.”

“You’ve got to be careful if you don’t know where you’regoing ‘cause you might not getthere.”

Management of a CPA Firm: The Highest Level

VISION

FIRM GOALS

PARTNER GOALS

ENGINES

Leadership

Operations

Partner Comp

Accountability

Management of a CPA Firm: The Highest Level

VISION

FIRM GOALS

PARTNER GOALS

ENGINES

Leadership

Operations

Partner Comp

AccountabilityTHEROSENBERG ASSOCIATES LTD.www.rosenbergassoc.com

CPA Firm Strategic Planning Cycle

Time of Year Step In The ProcessSeptember Begin planning the process

Late Oct/early Nov Convene strategic planning retreat; set goals for next year.

Nov/early Dec 1. Develop individual partner goals-linked with the vision.2. Complete work on current year goals.

Mid-Dec/early Jan Complete next year’s plan.

January-April Tax season

May to December

Implementation Implementation Implementation Implementation

September Start on next year’s plan.THEROSENBERG ASSOCIATES LTD.www.rosenbergassoc.com

Mission Statements

• Statement of overarching purpose

• Should be motivating and distinctive

• Its adoption should lead to change in performance and behavior…or else it has little or no value.

Some of my Favorite Mission Statements

“To make millions happy.”

“To support people night and day.”

“Number one in share of stomach.”

E pluribus unum.THEROSENBERG ASSOCIATES LTD.www.rosenbergassoc.com

Sample CPA Firm Mission Statement

Our mission is to provide specialized and technologically advanced services to our clients, while providing our people the environment to fulfill their personal and professional goals.

Sample CPA Firm Mission Statement

Our primary goal is to provide quality services to its clients in accordance with the best standards of the profession.

Our Firm is committed to a standard of excellence and to meeting the specific needs and concerns of each client we serve.

What can we conclude about the mission statements of CPA firms?

• Motivating and distinctive?• Do you think these statements will lead to

changes in performance and behavior?

Mission Statements For Most CPA Firms Are a WASTE OF TIME

• CPA firms are not all that different.• Great for wallpaper in your lobby.• Nice in your web site.• Benefits not worth the time.

Vision Statement

A series of high impact statements that say where you want to be in 5 years (most of which are things you have not yet completely attained)

“Setting BHAGs and going after them.” (Jim Collins’ Built To Last)

Brainstorming Session

A conversation about the future

If we were talking 5 years from now, what has to have happened over those 5 years for you to feel happy with the firm’s progress?

1. 2. 3. 4. 5.

Food For Thought

Strategic Issues• Where profession is headed• Our strengths & weaknesses• What partners want to earn• What is our market?• How are we different?• What is our image and reputation?• Services to provide; specialties and niches• Our talent (people)• Succession plan• Marketing plan• Mergers• Service quality• Technology

Food For Thought

Best Practices• Practice development• Pricing• Management and leadership• Franchised procedures• Partners leverage, delegate• Make the firm a great place to work• Partners are good bosses• Good partner relations• Partner accountability• Partners are not clones of each other• Performance-based partner compensation• Benchmarking

Food For Thought

External Factors

• The economy• Demographics• Supply of staff• World events in general• World events professionally (i.e., IFRS)• Government; laws; regulation• Competition

Sample Vision Statement

• 15% annual growth.• Take health care consulting national.• Develop specialties in construction and hospitals.• Move to a corporate governance structure.• Be the employer of choice in our market.• Develop business valuations and merger &

acquisition services.• Develop 5 new partners in next 5 years.

Goal Setting

Drill Down on Vision

Vision:1. 15% growth

2. Health care national

3. Construction specialty

4. Corp governance structure

5. Be employer of choice

6. Develop bus valuations

7. Develop M&A

8. Develop 5 new partners

Drill down on each

What are the specific things we will do to achieve each goal?

Example of drilling down

Goal: Develop a construction niche.

Action items:1. Identify a champion.2. Form a niche team. Specify names.3. Create a marketing plan.4. Deliver specialized training to team members.5. Join a construction trade association.6. Speak at a major construction conference.7. Merge in a firm with a construction niche.

Core Values

If the VISION is the heart of a CPA firm, the core values are its soul…

…CORE VALUES define a firm’s culture by clarifying its rules of behavior.

Ways that firms define core values

• Attitudes and beliefs that define our culture.• Values used to help us make tough decisions.• What we stand for; what we hold dear.

Acid tests1. Partners should be talking about and referring to

core values all the time.2. VIOLATIONS ARE NEVER TOLERATED OR IGNORED.

Examples of Core Values

1. Exceed client expectations.2. No personal agendas over the team’s interest.3. Everyone required to learn new skills.4. Partners set an example for the staff.5. Everyone does their share and a little bit more.6. We won’t tolerate lack of respect, politicking.7. #1 job of a partner: mentor/develop staff.

Why creation of core values is OPTIONAL for most firms

“In a corporation, when the President says turn right, everyone turns right. But with a group of partners, when the MP says turn left, one person turns left, one person turns right and one gets up and walks out of the room.”

Why creation of core values is OPTIONAL for most firms

1. No real impact in the firm.2. The firm tolerates transgressions (no backbone):

• Hoarding clients and billable hours.• Disrespectful treatment of staff.• “I have no time to mentor.”• Reluctance to discipline the rainmaker.

3. “Motherhood and apple pie” adjectives: Ethical Professionalism Integrity Trust Honesty Quality

Raise your hand if you don’t believe in these.

How to Create and ManageA Goal Setting Program

Success in achieving goals rises DRAMATICALLY when goals are in

writing instead of “in mind.”

Best Practices:Partner Goal Setting

1.Goals should be SMART:S SpecificM MeasurableA AttainableR RealisticT Time bounded

Good Words and Bad Words

Use action words

• Increase• Create• Sell• Reduce• Join

Avoid vague words

• Communicate• Promote• Instill• Consider• Conceptualize

2. Link individual goals with your strategic plan.

Vision Partner 1 Partner 2 Partner 3 Partner 4 Partner 5

Growth X X

People X X

Processes X X

Niches X X

Training X X

3. Goals should never be “given” to someone; let them draft the goals first.

4. Short list.

5. Communication throughout the year:

The best way to ensure the failure of a goals program:•Create on Jan. 1•No one talks to the person for 12 months•On Dec. 31: “Well, how did you do?”

6. Coaching.

7. Accountability

8. Celebrate your successes!!

Individual Partner Goals PlanPRODUCTION GOALS

Target ActualORIGINATION

CLIENTS BASE MANAGED

BILLABLE HOURS

REALIZATION

QUALITATIVE GOALSDeadline Weighting

1. Head up the banking niche.

2. Delegate 100K of small clients to managers.

3. Mentor Susie Staffperson.

4. Put on a law firm dog and pony show.

TOTAL 100%

Keys to Successful Strategic Planning

1.Ya gotta’ wanna2.Deal with negative people / COACH 3.Champion / COACH 4.Accountability / COACH 5.Less is better than more…6.Don’t overburden busy client partners7.SMART goals8.Monitor progress / COACH 9.Incentives / COACH

“Nothing energizes an organization like speed.”

Roberto Goizueta Chairman-Coca Cola

THE ROSENBERG ASSOCIATES LTD.www.rosenbergassoc.com

QUESTIONS?

1000 Skokie Blvd. Suite 555Wilmette, IL 60091

Phone: 847-251-7100Fax: 847-251-4622

marc@rosenbergassoc.com

Strategic Planning and Goal Setting THE ROSENBERG ASSOCIATES LTD

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