CPA Firm Poll Reveals Treasure Trove of Strategic Planning Insights

We polled dozens of CPA firms across the country to find out how they are doing strategic planning, and what’s working and what’s not.

Key findings from the poll:

Lack of execution, lack of time, and inability to build alignment are some of the biggest obstacles to successful strategic planning. That said, a secret to success was revealed: accountability after the event correlates very highly with the overall effectiveness of strategic planning. Multiple firms commented that hiring an outside facilitator for the event and for check-ins throughout the year was important to their success. Also, firms found it helpful to link partner compensation to the strategic plan outcomes. Not surprisingly, most strategic planning is conducted only at the partner level. This means there is an opportunity to bring more people into the process to improve buy-in and firm-wide leadership, though this becomes harder as firms get larger. Firms with strong leaders who prioritize annual planning and create clear, individualized goals found success as well.

Observations

• Annual strategic planning is the best practice, with 61% of firms reporting that as their cadence. In our experience, this regularity and frequency helps it become ingrained into the firm’s DNA.
• 17% of firms do it every 2–5 years. Some firms will use a less frequent strategic planning cycle (say every 3–5 years) and use it for more major updates to the firm vision or strategy, while also using annual partner retreats to keep moving the business ahead while staying the course of the current strategic plan.
• 19% of firms don’t have a set frequency. We’ve encountered many firms that use a wait-and-see approach to when it makes sense. While that provides flexibility, it’s easy to get sidetracked and not get to it until a few years after you needed to.

Observations

• Almost two-thirds of respondents said execution was a pain point. Clearly, a thoughtful plan is of little value unless the plan is executed. Execution needs to be built into a successful strategic planning process.
• About a third of respondents said being too busy was a pain point. With workload compression, baby boomers retiring and a staffing shortage, partners often feel squeezed for time. The catch-22 is that strategic planning is exactly the process that can correct this state of perpetual overwhelm.

Noteworthy comments from respondents:

• It’s time-consuming.
• Getting started is our issue.
• Legacy partners are stuck in the old way of doing
• We struggle to get all stakeholders informed and bought in.
• Execution falters rather than fails. Our plan is a rolling three-year plan and probably has too much tactical detail.
• I believe our implementation of Traction and EOS has solved for all the pain points mentioned above. Not perfect but addresses all of them.

After our first one, we weren’t great at execution. After that, we used a consultant to facilitate, and they held quarterly meetings for accountability. Gives us a chance to work on the business and not in the business.

Strategic Planning & Goal Setting for Results is the ultimate Cliffs Notes guide to strategic planning and partner goal setting for CPA firms. The book addresses: Insights into the three main phases of strategic planning • Steps to creating a strategic plan that drives results • Stimulating productive and creative brainstorming sessions • Best practices for goal setting • Exploring the core values of your firm’s identity and vision statement • Keys to seamless implementation of the strategic plan and navigating potential pitfalls along the way • Partner accountability

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Observations

• There is a lot of room for improvement. The respondents’ comments about what makes their process effective – or ineffective – shed more light on the issues and solutions:
  • Above $100M firms
    • Overall, our strategic plans are good, but it takes much longer than I would like to make final decisions.
    • The plan is good, but execution is difficult.
  • $30M–$50M firms
    • Aligns with our partner evaluation and goal-setting
    • People’s commitment to follow through is the challenge.
    • Regular communication. Assigning responsibility is helpful to hold individuals accountable.
    • Our managing partner’s leadership is very effective.
  • $20M–$30M firms
    • Implementing Traction/EOS has been a game changer for our firm’s strategic vision. We now work on our strategy every single week with our weekly L-10 meetings. We are making tremendous progress we never made before with just an annual strategy meeting. We started with a small group and then expanded it.
    • Written down and addressed at bi-monthly partner meetings and assigned a champion where applicable.
    • Firm leadership makes it a priority.
    • What makes it ineffective is the lack of buy-in and/or lack of partners that execute the plan.
  • $10M–$20M firms
    • Having a five-year vision and one-year plan provides a path for the entire firm to see. Transparency and involvement are key to bringing unity and effectiveness to the team, and we feel having a strong plan does that for us.
    • Partner availability between client commitments.
    • Follow-through is our downfall. Partners are too busy to carry it out.
    • Partners commit to driving sections of the plan, and this becomes part of their balanced scorecard for the year. Our Compensation Committee reviews their results with them.
    • We use a great facilitator and an accountability plan that compels us to get the items done. We complete almost all items every year.
  • Below $10M firms
    • Hard to establish effective goals and boundaries.
    • Increased opportunities for staff to demonstrate leadership
    • Partners are not aligned, so staff get many mixed messages.
    • Alignment of partners.
    • Lack of project plan with deadlines, responsibilities, and intermediate goals.
    • We invest in a consultant twice a year who keeps us focused and with assigned action items.

Observations

• Most firms are using a mix of non-equity partners, equity partners and executive committee members for their strategic planning.
• Almost a quarter of firms include managers. If facilitated well, this can be a great way to build buy-in, balance any “legacy thinking” and further spread execution duties throughout the firm.
• 9% include the whole firm, although the only firms citing this were firms $20M and under and with 100 or fewer employees. Obviously, this becomes more difficult with scale.

Observations

• The correlation between accountability after the event and the effectiveness of the strategic plan was very high (0.82). This high level of accountability may be the antidote to the number one strategic planning pain point of lack of execution.
• We ran the correlation between how closely compensation is tied to the plan and the level of accountability after strategic planning. It was correlated (0.52). Linking partner compensation to your strategic plan increases accountability.
• We ran the correlation between how well compensation is tied to the plan and the overall effectiveness of the strategic plan. It was also correlated (0.50). Whether the compensation link causes effectiveness is unclear, but linking compensation with the accomplishment of the strategic plan is still a best practice.

Observations

• Firms of all sizes are doing strategic planning and need to continue doing it to keep up with a fast-changing industry.

Conclusions

Strategic planning is more necessary than ever in a fast-changing landscape. Firms of all sizes are using it – and some with excellent results. However, it is not a gimmie. Leaders need to prioritize the strategic planning meeting, goals and execution for best results.