How to Measure Success

Source: Partner Insights

The following includes excerpts, reproduced with permission, from an article by August Aquila.

What would it be worth to you if you had a system that could measure your business development and management efforts? There are several systems that can help do this, but there is one that I want to discuss because it provides the accounting firm with a balanced approach. The system is called the Balanced Scorecard. It's about implementing your firm's strategy.

Here's how it works. Management uses the balanced scorecard to align the firm's strategy around four basic areas – financial, client, internal business processes, and employee growth and learning. Objectives are developed in each area along with measures, targets and action steps. The scorecard also requires you to do more than set objectives. You need to determine the cause and effect they will have on each other and your firm's strategies and desired outcomes.

For example, if your firm can improve staff and partner technical and marketing skills, and you provide them with access to a client relationship management system, we could assume an increase in professional productivity.

Further, if we create processes that provide on-time delivery, the development of new services and cross selling, we would further expect an increase in client confidence in our abilities and a higher client-satisfaction level, which in turn would provide us with a broader revenue mix and improve operating efficiency. All this would ultimately improve profits.

Every practice is different and it's up to you to determine what needs measuring and how best to do it. If you don't measure it you won't be able to change it. If you focus on the true drivers of your practice, you will see improvement in the financial results.

For the complete article, read “Don't Kid Yourself – Metrics Make a Difference.”

From Partner Insights, Aquila Global Advisors, LLC, June 2011, http://www.aquilaadvisors.com.