Best Practices in Goal Setting and Objectives

The following is a partial list of  best practices from the “Goals and Objectives” segment of the  CPA Best Practices Assessment Tool™ Volume II.  It will be available to the profession in May. Volume I is currently available — click here for details. Members of CPA Leadership Institute receive Volume I without charge. Volume II evaluation has not yet been determined.

There are five pillars that support every CPA firm, no matter the size. Best Practice firms pay equal attention to all the pillars, and work to build a foundation of accountability under each. The five pillars are:

• Growth
• People
• Client service
• Financial
• Firm (infrastructure, overhead, etc.)

Best practices for setting goals and objectives related to any of the pillars are:

1. Tie goals and objectives to a vision of what you want to accomplish. Goal setting in a vacuum is never very effective in the long run. Start with a view or idea of what you want to accomplish. Firms that just start “doing something” without the end in mind will not get a return on their investment of time or money.

2. Set specific goals and objectives. Goals and objectives that are specific, rather than vague or generic, are also measurable. A goal to “be more active and visible in the community,” for example, is worthy but difficult to measure. A better goal would be to “attend a community activity once per quarter.”

3. Define accountability, and establish a system to manage it. The key to success is to implement the behaviors necessary to accomplish a goal. Those who are responsible must understand their roles and feel personal accountability for implementation.

4. Give partners ownership. Partners should take ownership of each goal and be committed to actively supporting the decision. Because they’re role models to the staff, partners are watched and copied. A partner’s negativity toward a goal will influence others, which leads to lack of implementation. The best way to engage partners in the firm’s goals is to let them participate in their development.

5. Establish and communicate the business case for change. Goals and objectives usually mean change — and change is painful for many. You must have a compelling business case for changing and gain everyone’s acceptance that the resulting benefits outweigh the discomfort associated with changing behaviors.

Visioning (Strategic Planning)

Goal setting and objectives should all be connected to your vision of what the firm should look like in three to five years. Establishing that vision up front enables you to set goals and objectives, in each of the five pillar areas, designed to accomplish your vision. Here are several best practices for establishing the firm’s vision:

1. Establish a vision the partners believe the firm can accomplish in three to five years. The vision can be defined in a number of ways, provided it’s “specific” and “measurable.” Examples include: 

• Top 300 firm
• Best firm for people to work for
• Largest firm in the market
• Income per partner of $X
• Revenues of $X

Determining whether a vision is reasonable or needs to be modified requires a thorough discussion of the possible ways of achieving it. Consider, for example, generating a certain level of gross revenue within three years, a common vision among Best Practice firms. Options for achieving that vision include:

• Raising the price of current services
• Replacing one-time non-annuity services from the prior year with the same volume of services
• Providing additional services for existing clients
• Attracting new clients

In our experience, firms that set revenue goals find that 65 to 80 percent of the gross new business needed to meet those goals will come from the existing client base. Tracking client satisfaction and the quality of your client service is necessary to assure that clients will pay the price increases annually without shopping their work. The more satisfied your clients are, and the better they recognize the value you deliver, the easier it will be to get their non-annuity one-time project work and introduce them to new service capabilities — such as estate planning, financial services, or specialized tax services — as your firm develops them.

2. Understand your competitive differentiators and the value proposition you offer. If your partners can’t articulate the reasons prospects should choose your firm as their service provider, the market probably can’t either. If you’re not sure why clients picked your firm, start by asking them and ask why they stay. Only with this knowledge can you attract the new clients needed to accomplish your growth goals.

3. Define the managing partner’s leadership role.  The managing partner must hold partners accountable for the development and accomplishment of their plans, much like a sales manager leading and supporting a sales team.

4. Continuously assess the quality and extent of your service capabilities. Ask yourself  whether you can you stay relevant into the future with what you have now in terms of skill sets and service capabilities. The question is: Can we continue to have that kind of impact if we are not better business advisors; if we are not knowledgeable about our clients’ businesses, family situations, competitors, etc.? Do we have the capability to serve clients’ needs going forward in an environment of artificial intelligence (AI)?

End of partial list.

I will be presenting several webinars sponsored by CPA Leadership Institute. They are listed in the catalog.