Klein, Rowe, & Co (KRC), like most firms, have one key item on the to-do list: grow.
And while growth is good, having a sound strategy in place to do so is critical. Over the years, KRC built its book of business somewhat accidently with new clients coming through the door from across disparate industries—many of whom didn’t necessarily fit the firm’s business model. This culminated into a hodge-podge of accounts that the firm was not ready or able to support. At the end of the day, the real issue was lack of strategy—that is, a failure to be intentional about growth and long-term sustainability.
Join Klein, Rowe & Co, our fictional case study firm, as they learn from our Automating Success webinar series. In each webinar, our thought leaders will share their expertise on how this firm might address those challenges. In each KRC follow-up, we'll share with you what our fictional firm has learned and the next steps they might take to reimagine their firm. Please note: our case study and follow-up articles are fictional and intended for entertainment and educational purposes only.
In this week’s Automating Success webinar, “The strategy to change your firm’s business model,” KRC partners sought focused guidance on how to grow their firm with intention.
The partners, now committed to redefining their business model, understand that major changes are required to support healthy, sustainable firm growth. They also know that the first step is outlining a sound strategy. To accomplish this, the partners started by educating themselves on the basic principles of growth:
Viewing growth activities as a job—There is a laundry list of tasks that come with growing a business. Just like with compliance work (for example, preparing a tax return), there is a list of to-dos that must be performed. The same is true for growing your business. Improving marketing efforts; building structured, repeatable processes; and hiring qualified staff are just a few growth activities to consider. Building a business is a big job, so treat it like one.
Creating ‘sacred’ blocks of time—Healthy firm growth cannot happen if you don’t make the time to plan. This requires partners to block time on their calendars—time that is dedicated to handling all those growth activities. It’s recommended to start by blocking a two-hour chunk of time each week. This time block should be considered “sacred” and used only to focus on growth tasks.
Moving out of technical work—For a firm to grow, partners must transition to an entrepreneurial mindset. This means weaning themselves out of production work—like preparing financial statements and tax returns—and spending more time working on the firm rather than in the firm. Growth activities, such as hiring qualified staff, support this move. While compliance work adds to the bottom line, partners must commit to delegating technical work and trusting their staff to handle it.
Managing your calendar—Service work is ultimately limited to your professional capacity—your time—and there are only so many hours in the day. Beyond that initial two-hour block of planning time, partners should continue to manage their calendars accordingly in order to balance time spent on technical tasks versus larger-scale, visionary-driven work.
What KRC learned…
A big takeaway for KRC partners was that they don’t get to do everything they want. In other words, while they may like being entrenched in the technical work or prospecting for new clients, they have to put more effort into strategizing. This means moving out of the day-to-day and into true entrepreneurial roles where the focus is on long-term planning and implementing firm-wide changes that support sustainable growth.
Partners stated: ”In the name of growth, we got comfortable taking any client who walked through the door, whether they fit our business model or not. We also tended to do the work ourselves or just throw staff at it, whether they were qualified or not. This really did translate to accidental growth as well as a fair amount of chaos. We know we have to be more intentional, and that means stepping back and starting over with a well-thought-out strategic plan.”
KRC partners agreed that the first step is to block time each week (at least two hours) to begin the planning process. At first, this will include identifying areas in need of improvement—for example, staffing, the client onboarding process or identifying what an ideal client looks like for the firm.
Additionally, with the mindset of an entrepreneur, partners will also ask a series of questions to further fortify a solid business model:
What services are we really good at performing (and like to perform)?
What new service lines/revenue streams should we consider?
What niches are we best suited to support?
What are the components of our ideal clients?
What is the right balance between compliance and advisory work?
What are other firms doing to produce excellent results?
From here, KRC partners can begin to implement improvements based on existing challenges and the agreed-upon vision for the firm.
KRC action items…
Continuing down the path of renewal, KRC partners developed another list of action items. Tasks focus on transitioning away from the current accidental business model to one that is rooted in strategy and intention. Action items include:
Agree on the day and time for a weekly partner planning meeting (that sacred two-hour block).
Commit to meeting off-site for the weekly meeting to avoid office distractions and being pulled into day-to-day technical work.
Communicate to all staff why partners will be offsite weekly and the importance of keeping this block of time sacred.
Set a deadline for developing the initial list of improvements as well as for answering KRC’s unique list of strategic-business-model-building questions (from above).
Once improvement activities and growth to-dos are agreed upon, make a list of “won’t dos.” In other words, anything that would work against an intentional business model, such as taking on the wrong type of clients, accepting work that falls outside the firm’s identified skill set or assigning partners to technician work over delegating to qualified staff.
Check back regularly to learn how KRC is progressing. In the meantime, feel free to use any of the ideas listed above to help improve your firm’s intentional business model.
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