If you follow me, you know that I write and consult extensively around strategic growth. That means I help firms move from reliance on the individual-contributor, "book-of-business," tactical, generalist model, to a leader-driven, strategic, specialist approach.
While strategic growth will always be important, today's market environment requires that we simultaneously optimize opportunistic growth. Because fish are literally jumping into the boat these days, this ensures that we get the best possible catch.
Strategic growth is about sowing the seeds for future expansion. It requires an investment over time to make it sustainable, profitable, fast and efficient. Opportunistic growth, on the other hand, refers to what's under our noses — the opportunities we can wrangle, close and get paid for.
While such opportunities typically follow years of strategic seed-planting, today looks different. Heightened market demand is one impetus. Another is mergers — clients are bolting due to insufficient attention from their current provider and/or because they do not wish to be part of a huge firm, opening the door for other CPA firms.
How do you optimize this dynamic? I see two choices. The first is to manage and close opportunities as your firm always has, leaving each opportunity up to the individual partner to pursue as best they can. The second is to effectively manage the entire inventory of near-term opportunities, permitting you to increase efficiency and drive more revenue in a shorter time.
Having spent much of my early career running sales organizations for large corporations including IBM, I learned a great deal about managing an entire sales force in optimizing win rates and revenue from big-ticket opportunities with long, complex selling cycles. The same approach that prevailed there also applies to our current environment. In selling, efficiency and effectiveness means higher revenue per salesperson, which is the mantra of these sophisticated corporate sales organizations.
Though it sounds intuitive, it's not common thinking within accounting. Typically, our firms tend to face whatever is in front of us, clobber it into submission and haul it in!
Understanding the issues
A recent conversation with a consulting client went something like this: "Gale, we've been infused with private equity money, but the PE has revenue expectations that exceed our comfort level. I think we need sales training."
I responded, "How do you know that's the solution?"
Upon reflection, we discovered that the real issue was how to drive accountability and performance for revenue growth at all levels of the firm. It's not that they didn't know how to sell, but rather, that they lacked an understanding of the process and the cultural imperative to drive significant revenue.
What, then, should you be doing to leverage opportunistic growth? First and most essential is establishing a firm-wide opportunity pipeline process, a mantra I've been chanting for years. In corporate America, a pipeline is the cornerstone of efficient growth and the key to achieving annual metrics. Why? Because it keeps a constant focus on revenue as the top priority. Profitable revenue fuels the furnace for everything else. When it's taken for granted, organizations lose focus and everything else is impacted over the longer haul. I've seen this mistake countless times in my career — companies ride market conditions and assume revenue will always just "be there."
Many CPA firms have an industry or service-line pipeline report, but not a firmwide pipeline process, with significant opportunities readily visible to all. While a pipeline is not complex, it requires consistency and discipline. Firm leaders gather for 30 minutes every other week to review opportunities, typically over video. The responsible individual for each prospect articulates the next step, reason and due date. Keep the quantity manageable by establishing a transaction cap — anything smaller is handled outside the biweekly opportunity pipeline review.
A consistent and visible pipeline process not only helps drive a high win rate, but also reveals problems, like the wrong individual pursuing a given account, or opportunities that have become stuck in their tracks. I've heard every possible excuse for not adopting this proven method, from "We don't have a CRM system and we can't do it in Excel," to "We have too many opportunities to get through in 30 minutes!" Neither holds water. Best practices, starting with a robust large/strategic opportunity pipeline process, are the key to consistent, efficient short-term growth.
Optimizing opportunistic growth is a muscle too many firms simply have failed to develop. Yet in this era of flush market conditions, shaping your future client base with the largest, most profitable clients is more important than ever!
