Case Study
A client recently made a “great hire” by bringing in an ex-salaried partner, with 15 years experience. Their number one objective in hiring was to grow the firm. After a while it became obvious that although the new hire was experienced in client management, they were not so great in internal areas such as project management & managing the team. This meant that our two partners were not freed up to get out and do more with their clients. Instead they were stuck in the same spot they were before, managing the team and ensuring the work got done.
This situation could have been avoided with some strategic thinking in the beginning, before the hiring process began.
This is just one example of a common mistake that firms encounter when they take action to expand capacity. That mistake is hiring the same types of people and expecting a different result.
Let me talk about why this happens, and explain later how to overcome the issue.
Firstly, I believe this occurs because Accountants are “technical doers”. If you think back to Michael Gerber’s personalities in ‘The E Myth’, he points out that the ‘technician’ is not the best person to be running businesses because they do not tend to make the strategic decisions the way more entrepreneurial types do.
This means that growing your firm requires you to change your mindset from a technician to an entrepreneur. A technician will think that the decision to hire someone to expand the practice is strategic in itself, but I’ll show you that there is a flaw in this.
If we go back to the case study, the number one decision that could have changed the entire outcome for this firm was about what type of role they needed.
Let me explain…
There are two types of decisions that we can make as business leaders, Operational Decisions and Strategic Decisions.
1. Operational Decisions
These decisions are made based on daily activities around production. A typical decision might be “We need another person to free ourselves up some more”.
From this viewpoint it seems like a great idea to hire another accountant with 15 years experience. The assumption here is that hiring another ‘processor’ will increase outputs, thereby taking some workload off the partners.
2. Strategic Decisions
Strategic decisions can only follow from big picture thinking, and specifically, correctly identifying the role that the business needs to grow and expand.
When leading firms decide they want to grow and expand, they decide this means that the partners must be freed up from the day to day operational roles.
It’s important to note: the roles they play are operational and involve project management, quality control, training and people management. In distinguishing these roles, we can then see that we need essentially two types of roles. One to look after the team, and one to look after the clients. (see TA 49 How to Avoid the Hiring Mistake Every Firm Makes – where I discuss the strategic org chart in more detail)
Once you have made this distinction, you can then begin the recruiting process with a better mindset and focus on filling the right role with the correct person.
When this position is successfully filled, the partner/s may then focus fully on building their Premium Practice model more entrepreneurial aspects of growth, such as designing additional fee generating service offerings (Premium Offer – packages and products).
