Typically accounting firm leaders wish to please as many ‘stakeholders’ as possible when running their firm. When making important leadership decisions that affect their firm, she or he should engage with all key departments within her or his accounting firm. This does not just include the services lines of Audit, Tax, Consulting, etc, it is arguably more important that Business Development and Marketing specialists are included in important leadership decisions.
“You can please some of the people all of the time, you can please all of the people some of the time, but you can’t please all of the people all of the time.” -President Abe Lincoln
President Abe Lincoln’s quote above is as true today as it has ever been, especially when it comes to making important leadership decisions that affect your firm. I think this is one key element a leader should bear in mind when making key decisions within an accounting firm. Along with the old adage that “you have two ears and two eyes, but only one mouth. So use them in that percentage”, they will ensure you significantly reduce the chance of making an erroneous decision.
Marketing and Business Development?
After all, your marketing and business development professionals are the people with their fingers on the pulse of the profession, and on the trends within the client and prospect cohorts. It is this knowledge and this vital level of understanding which will be most likely to be able to shape important leadership decisions in such a way as to maximize the benefit for the firm.
An Example of One Firm’s Mistake
I know of one firm, by way of example, who was losing business, and the CEO assumed automatically, as many have in the past, that the issue was due to price. In other words, he thought he was losing business to competitors because they were undercutting him.
So, he did what he thought was obvious, he cut his fees. Even for long term clients who had no intention to leave. Thus, even though he also cut his overheads, with a professional staff, he could not make equivalent cuts in total overheads, which meant he cut his margin dramatically. These margins were unsustainable, and the firm folded.
In fact, if he had consulted his Marketing specialist before making such an important leadership decision, he would have discovered that the reason he was losing business was that he was not promoting the up to date technological services his clients wanted. Thus, they did not know his firm was able to fulfill their ongoing needs, and so they went elsewhere. They probably ended up paying more for these services at another firm.
I am sure I can suggest several other such instances where not consulting their Marketing specialist whilst take a strategic decision has also proved, with hindsight, a mistake. There are also case studies where listening to Marketing pays off.
Just imagine, if the CEO of the firm had asked Marketing why he was losing business and listen to what they said. He would have benefitted from including marketing in his important leadership decision and still be in an otherwise profitable business.
Leaders of firms cannot assume they know the answers. All the really effective CEOs and Managing Partners I know are excellent communicators, but perhaps their greatest communication skill is to ask questions and, most important, listen and reflect on the answers.
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