Are you feeling increasing competition? Concerned about challenges in getting new clients? Struggling with unpredictable revenue streams and fee pressures? Stressed by partner conflict and lack of accountability? Worried about attracting and retaining your top talent? Frustrated by lack of or inadequate growth? Good news first: You are not alone. And the bad news? Most firms will respond to these challenges in the same way you will do. End result? More competition. More pressure. So what can you really do to overcome these challenges? The answer lies in your “strategies”, provided they are sound and unique. Many people cannot differentiate between strategy and tactics. What you do is an end result of your strategy, and not vice versa. So saying “we will do inbound marketing” is a tactic, not a strategy. In “Playing to Win – How Strategy Really Works”, AG Lafley and Roger Martin, sum up strategy in the most succinct way you will ever come across: They say, Strategy is “making specific choices to win in the marketplace.” They say strategy is “an integrated set of choices that uniquely positions the firm in its industry so as to create sustainable advantage and superior value relative to the competition.” Take a closer look, find answer to these four questions honestly and you will surely be closer to defining your new strategies.
- Integrated Set of Choices:It’s not about just making multiple choices. It’s about making “integrated” choices. In other words, each of your choices must support and augment your other choices. Question to ask: What choices my firm is making now? e.g. Organic growth alone? Or organic and inorganic growth? Niche development or generic but high-value services?
- Uniquely Position:Two powerful words! Two different insights. First: you would want to “position” your firm. Second: You would want to do so “uniquely”. It will probably boil down to what you can do far better than others in your area. Its not just about unique skills or knowledge but what is the “value” of such unique things that clients will see differently. Technology, more and more automation of routine processes, new generation clients’ behavior pattern and work ethics of young employees – all combined will need transformation of how your firm operates. Question to ask: How will my firm differentiate? e.g. Will it be aggressive branding that conveys value differently? Will it be creating your own customized technology that other firms cannot buy off the shelf to replicate your “unique advantage”?
- Create sustainable advantage:Three powerful words! Three different insights. First: Create. You would want to offer something new that others are not offering. Second: Sustainable. Market always catches up. What you create will sooner or later get copied. And when that commoditization happens, prices and margins fall, which makes it difficult to sustain that new thing. Third: Advantage. Whatever you create, it should result in an advantage, not just for your firm but more importantly, for your clients. Question to ask: What does my firm do or will do that will create long-term advantages for my clients? e.g. Will it be the way we process differently than other firms – creating time or cost or both – that clients will benefit more from? Will it be our homegrown software that helps us turnaround work 30% faster than other firms – will clients appreciate faster service?
- Superior Value Relative to Competition:This is the most difficult aspect to measure. Not because it is relatively non-measurable but because you do not decide about value, the client does. And unless you are constantly in touch with your clients to ascertain how they perceive value of your services, you will not know how it measures against your completion. You may feel you are better than others but a simple measure of “value” is whether your clients are negotiating for price. If they do, more often that not, they may not be understanding the “value” you are offering. Question to ask: What can my firm do better than others? e.g. Are there any services that my firm delivers which are better than others (remember – think from client perspective)? In which ways (time, cost, insights)? If all firms are using similar accounting softwares/technology, how are my reports better than others?
If you noticed, there are two key secrets to creating killer strategies. One is to really figure out what you do vis-à-vis your competitors. Second is to be really able to see it from your clients’ point of view. We know at-least one strategy that our clients – successfully growing accounting firms – are using to fight the number one problem of the accounting profession i.e. commoditization of accounting services business and we’ll be glad to share that strategy with you. Meet us at California Accounting Show, June 2-3, 2014 or at AICPA Practitioners Symposium, June 9-10, 2014. Can’t make it to these shows? No worries. Email us at iBenefit@pransform.com and we’ll respond quickly.