Print Edition
      October 2008

The groundwork comes first

By Stephen Rosenhek
Illustration: Baiba Black

When undertaking a strategic planning process for your partnership, spend time on the planning portion of the exercise

The partners of professional services firms are generally so caught up in running their businesses on a day-to-day basis that they rarely look ahead more than a few weeks or months. Most probably feel on top of things when they finally schedule the staff’s summer vacations. But when do they step back to examine the longer term picture and plan the firm’s next three to five years?

When years of success lead to sustained growth, it is tempting to adopt the if-it-isn’t-broken-don’t-fix-it philosophy. However, it is important not to become a victim of success and to stay in check with the future of the business; the work that keeps the firm busy today may not be enough to ensure tomorrow’s success. A firm’s leadership must overcome inertia and undertake a strategic planning process. It is a demanding exercise, both in terms of time requirements and the introspection needed to answer difficult questions, namely those pertaining to a partnership’s identity and where its partners want to take it. Leaders must also address the soft or intangible issues during this process, not usually the forte of an accounting profession-al. But preparing a road map for the future is the most important and fruitful investment a firm can make. Because, as Yogi Berra was thought to have said, if you don’t know where you’re going, you’ll wind up somewhere else.

Strategic planning process
Last year RSM Richter’s Montreal office decided to undertake the strategic planning journey. It was an opportune time for it to do so as the firm had celebrated its 80th anniversary. But because the firm was successful and thriving many wondered why it should bother with the process. However, the reality is that a professional services provider with 400 employees and 40 partners must think about and appropriately plan for the future.

Taking advantage of the best opportunities in the marketplace and addressing its future challenges requires systematic analysis and decision-making. Moreover, strategic planning should be initiated when a firm is prospering, not during a crisis. Employees also consider this to be an important exercise, as they wish to ensure that they will have interesting career choices aboard a ship that is going places.

As a partnership’s hierarchy typically includes an important horizontal structure, leading the strategic planning process can be challenging. Thus, in Richter’s case, it hired an outside expert to help chart its course. The consultant facilitated the process, searched for and validated findings by talking to employees, partners and outside sources and acted as a sounding board to ideas and issues. The strategic planning process basically involved addressing the following three questions:

Mirror, mirror on the wall
A firm is much like a human being. It constantly reacts to both internal and external (market) forces and is subject to various cycles throughout its life. Few are immune to midlife crises, and some are good at one stage but falter in the next. Being successful requires the occasional look in the mirror to affirm who you are and what you wish to achieve. If self-evaluation reveals some undesirable love handles and a few blemishes, definite steps can be taken to eliminate them.

Introspection requires taking stock of all relevant information, namely:

Prioritize major opportunities
The last two items — referred to as SWOT (strengths, weaknesses, opportunities and threats) analysis — focus on the firm’s core business to identify the most promising opportunities, those that call upon its strengths and are therefore the easiest to lever. It is critical that the process of identifying new business opportunities be open to all professionals within a firm, so everyone can provide valuable input. Once this is accomplished, it becomes important to narrow the list. The following criteria should guide the prioritization of opportunities:

Some priorities will be more pressing, partners may rally around certain initiatives, while others may not garner much support. Once management has identified the most promising opportunities, it is important to explain to all partners why these have been retained and others set aside.

Ultimately, the choice must reconcile the needs and desires of senior partners, younger partners and recent hires. The idea is to find a goal and objectives around which everyone can rally (or at least not revolt). If these are on target, most partners should recognize them and realize they have been discussing these ideas in small groups for years. One should also accept that there will always be a group that believes the objectives are unattainable, that others will wait on the sidelines and jump in if their participation is requested, and that more will join the bandwagon as successes accumulate and the process continues to move forward.

Guidelines for new decisions or how to build a new Paris
Once a firm has decided where it wants to be, the next step in the process is to figure out how to get there. As was the case for Baron Haussmann in preparing to rebuild Paris in 1852, the solution is not to demolish everything and rebuild but to set guidelines for all new decisions.

Superposing a template of the future city plans over the current picture, one can see what fits, what doesn’t and what eventually will not fit over time. While some structures may seem in need of tearing down, i.e., close a division or some offices, the associated costs must be considered. Most importantly, every decision the firm makes going forward must respect the blueprints for the new Paris, focusing its collective energy on accomplishing this plan and avoiding old behaviours.

Build the team that will get you there
The next step in the strategic planning process involves building the team that will be responsible for the exercise. This team will be responsible for achieving buy-in throughout the organization, removing all obstacles to success and essentially doing the heavy lifting.

The leaders of this strategic planning team must strive to make the objectives compelling in order to obtain buy-in among employees. They articulate and relate images that will allow partners, employees and clients to visualize what the firm will look and feel like in three to five years, as the outcomes of strategic planning are not tangible from the outset. Motivating an organization to move forward requires inspiration.

Once the overall objectives are defined, team members will be assigned specific responsibilities, as objectives are drilled down into layers and bite-sized pieces throughout the firm and realistic targets are formulated. These responsibilities should be divided along the lines of the identified projects and issues, for which distinct delivery streams must be established. Their nature will depend on what makes sense for the firm, but for illustrative purposes, consider the following project streams:

When first addressing this road map, members of the team should start by examining what may be slowing the firm down or what obstacles have to be removed before embarking on this new course. This can be as straightforward as eliminating unproductive time hogs, but it will also involve the more complex and demanding challenges of weaning employees off old behaviours, modifying their positions and getting them to rally around the newly identified objectives.

One of the biggest challenges during the strategic planning process is spending enough time on the planning portion of the exercise. People naturally become anxious to get on with it. While it is important to identify low-hanging fruit and some easy early wins, it is critical to properly carry out the groundwork and lay the foundation for a successful implementation. As the Chinese military strategist Sun Tzu pointed out, strategy without tactics is the slowest route to victory and tactics without strategy is the noise before defeat.

Stephen Rosenhek, CA, is the comanaging partner of RSM Richter’s Montreal office. He is also the technical editor for Practice management

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