Is Your Firm Losing Its Edge?

Source: CPA Practice Management Forum

 According to consultant Allan Koltin, “It only takes a couple of years for great firms to become good firms, but it can take an entire decade for a good firm to turn into (or return to) a great firm.” He urges firms to look for the warning signs that they are drifting away from greatness:

 Leadership and growth. Great firms are “asset building” firms, not “asset milking” firms. They invest in creating profitable growth over the long term rather than pulling out profits in the short term.

 Human capital. Great firms attract and retain superstars by paying higher wages, providing superior training, and offering quicker career advancement. Firms moving from great to good, Koltin finds, “slowly take their foot off the accelerator in terms of making strategic investments in human capital.”

 Decision-making. One sign of a great firm is a great CEO who makes decisions quickly and enables the firm to correct its course quickly, like a speedboat. Good firms, on the other hand, “are so concerned about consensus .  .  . that they end up much like a rudderless, cumbersome big ship.”

 The three C's. Koltin divides partners into three types: Content, climbers, and crazy. “When the content partners begin to make up the majority,” Koltin warns, “the firm is on a crash course to good, or possibly even “not-so-good.”

 For the complete article, read “How Firms Can Go From Great to Good.” 

 From CPA Practice Management Forum, Vol. 9, No. 7, July 2013, p. 21.