The problem with strategy…is the illusion that your firm has one.
Partners of accounting firms often make strategy development for future success much harder than it needs to be. For some, there is too much focus on the tools: environmental scans, SWOT analyses, client analyses, competitor analyses, financial modeling, and so on. Others get into trouble because they think it’s all about the broad, conceptual, future-oriented, big picture stuff — not to be confused with tactics. Still other times, partners think that strategy is what happens when they think about changing direction in their firms.
The reality is that strategy is at some level about all of the abovementioned things, and you can’t do a satisfactory job with your analyses alone, or your big picture alone, or your changes alone. You have to do a bit of work on all of them.
That’s actually a lot easier than it sounds. In my work with both small and more sophisticated accounting firms, my preferred approach is to treat strategy-making as developing a set of answers to five interlinked questions. The questions — which cascade logically from the first to the last — are as follows:
- What are the broad win-with-client aspirations of our firm, and the concrete goals against which we can measure our progress?
- Across the potential markets & client types available to us, where will we choose to play and not play?
- In our chosen place(s) to play, how will we choose to win against the competitors there?
- What capabilities are necessary to build and maintain to win in our chosen manner?
- What management systems are necessary to operate, build and maintain the key capabilities?
The art form is to have five answers that are consistent with each other and actually reinforce one another. Aspirations and goals to be a great national player and a where-to-play response that is local, doesn’t match well with a how-to-win on the basis of advice reach — because competitors with national aspirations will almost certainly out-invest and maneuver you. Winning on the basis of superior scalability is unlikely to happen if you don’t have a concrete plan to build the capabilities and a management systems to deliver.
So where do you start? Most firms start at the top with some kind of mission/vision exercise that drives participants around the bend. The reason it drives them crazy is that it is extremely difficult to create a meaningful aspiration/mission/vision in the absence of some idea of where-to-play and how-to-win. That’s why those conversations tend to go around in circles with nobody knowing how to actually agree on anything. Any mission or vision will do when you don’t have a thought-through where-to-play or how-to-win.
That said, if you think entirely about where-to-play and how-to-win without consideration of aspirations and goals, you may end up with a strategy that is effective for its intended goal but isn’t something you would actually want.
What this means is that to create a strategy, you have to iterate — think a little bit about aspirations and goals, then a little bit about where-to-play and how-to-win, then back to aspirations and goals to check and modify, then down to capabilities and management systems to check whether it is really doable, then back up again to modify accordingly.
While it may sound a bit daunting, iterating like this actually makes strategy easier. It will save you from endless visioning exercises, misdirected SWOT analyses, and lots of heroically uninformed big thinking. Crafting your strategy in relatively small and concrete chunks and honing the answers to the five questions through iteration will get you a better strategy, with much less pain and wasted time.
Steve Browning is a Practice Strategy Consultant, and National Manager of the Executive Leadership Enterprise, BT Group Licensees. He is also master facilitator of BTGL’s Strategy Choices Program.
BT Financial Group | Securitor | www.securitor.com.au
- The Problem with Strategy - 27 January 2015
