THE HIGH PERFORMANCE FIRM: A TEAM EXERCISE WORLD CLASS TRAINING: GETTING YOUR FIRM ON TRACK PRESENTED BY SAM M. ALLRED, FOUNDER & DIRECTOR OF UPSTREAM ACADEMY THE HIGH PERFORMANCE FIRM: A TEAM EXERCISE

For the past 10 years, we have listened to partners across our profession talk about the high performance firm. Most firms are more than a stones throw away.

Each year we have the privilege of interacting with hundreds of firms and thousands of partners across our profession. We watch with great interest those performance areas where a particular firm might excel.

Please know that when we use the term “high performing firm,” we think of something that is reachable by all. In our view, this isn’t a term reserved only for a select group of firms.

DEFINING THE TEAM EXERCISE For purposes of this exercise, each of you are Upstream Academy consultants. Your client is the CPA firm Strike Hook & Land, LLP. Your goal is to help them strategize how to create a high performing firm over a three-year period.

DEFINING THE TEAM EXERCISE We examine their current indicators in the six key areas of firm performance. Your team will then be assigned two key performance areas. You need to create the vision of high performance within these areas and develop a first-year plan for moving the firm in the right direction.

HIGH PERFORMANCE DEFINED In order to be a high performance firm, a firm must excel in the following six areas. A high performing firm is never a “one trick pony.” Performance Areas 1. Financial Performance 2. Client Management 3. Business Development 4. Team Development 5. Partner Effectiveness 6. Leadership 7

RATING SCALE Measurement Scale Rating World Class Performance 9 or 10 Excellent Performance 7 or 8 Good Performance 5 or 6 Marginal Performance 3 or 4 Poor Performance 1 or 2 8

STRIKE HOOK & LAND’S POINT A Some Key Points 15 dedicated, loyal, hard-working partners. Well established firm. Good reputation in the market place. Good reputation for client service. Ability to hire really good people right out of college. Active and well respected in the communities where they have offices. 9

STRIKE HOOK & LAND’S POINT A 1. Financial Performance Average partner income is measurably less than firms in similar markets. Realization hasn’t changed much in five years and hovers around 85%. Utilization has been somewhat of a roller coaster bouncing between 41% and 44%. Billing and collection continue to be sore points in the partner group. Net fees per partner and per person have remained largely unchanged over the past five years. 10

STRIKE HOOK & LAND’S POINT A 2. Client Management Although the firm provides good client service, they struggle with consistency and clients are rarely “amazed” by the service they receive. Their level of service has remained largely unchanged from year to year. Partners regularly refer to clients as “my clients” and most clients have a single point of contact within the firm. The firm has never really focused on the average revenue generated by their client base and there is way more excitement in landing a new client than in generating additional work from an existing client. Because the firm rewards partners for their managed book of business, there is little effort to transfer clients to the individual most capable of providing the best service. The firm has a poor track record for removing D-level clients. 11

STRIKE HOOK & LAND’S POINT A 3. Business Development The firm celebrates the landing of any client – regardless of quality. Although the firm talks a lot about business development, they do not have a written strategic marketing plan. The firm has a poor track record cross selling services. Each partner chooses to closely guard their clients. The firm does not have a written client screening process. Only a couple of the partners are active in the business community. A few of the partners are aggressively waiting for the phones to ring. 12

STRIKE HOOK & LAND’S POINT A 4. Team Development The firm has a bench strength ratio of 60%. All employees below a partner have a coach. Every partner is assigned to coach at least two individuals. Employees can pick their coach. There is a poor track record for developing leaders within the firm. The partners are frustrated that the future leaders aren’t doing enough to progress rapidly towards ownership in the firm. The firm has a good track record for hiring great people out of college. While there is a good culture within the firm, there is little formal career development happening with the firm’s employees. 13

STRIKE HOOK & LAND’S POINT A 5. Partner Effectiveness Partners like to remain in their comfort zones and most of what they do could be done by someone below them. The partners are good at what they do and continue to largely do the same thing year after year. The partners are generally more supportive of firm decisions and directions than they are committed to them. Partners do not have a written plan to get continuously better/more valuable each year. Slightly more than half of the partners are opposed to bottom-up evaluations. The firm does not have written performance standards nor are there clear expectations for those at the partner level within the firm. 14

STRIKE HOOK & LAND’S POINT A 6. Leadership The firm doesn’t have a consistent strong vision nor a strategic plan that everyone is committed to. The partner group struggles with artificial harmony and has issues that everyone knows about, but no one really wants to address. No one really likes the partner meetings. Many partners hardly say a word during the meeting, but there seems to be a lot to say in closed door sessions after each meeting. Partner goal setting is poor – partners usually set their own goals and fail to stretch themselves for the good of the firm. There is very little accountability at the partner level. Partners want to retain the right to be a part of all firm decisions. 15