Strategic planning is about the choices partners make about the future of the firm, both what to do and, more important, what not to do.
A second key aspect of strategic planning is the timeline: How far out should the strategic vision go? The decision regarding timelines is more impacted by where the firm is and the challenges it is facing than any other factor.
If your firm is facing real, impactful challenges that affect it today, the strategic timeline should be short — no more than two years. For example, if the firm is facing a challenge to its profitability where profit and therefore partner compensation has not grown or kept pace with top-line growth, that’s an immediate challenge and strategic planning takes on a more tactical short-term view. If your firm is doing well and the challenges are more long-term in terms of potential impact, strategic planning takes on a longer-term view. For example, if the firm is doing well financially, but its service portfolio needs to expand, long-term strategies need to be developed and implemented to re-orient the service portfolio, adding new services and maybe no longer investing in certain services provided today.
Regardless of the time factor, the lack of ownership is an implementation and leadership challenge to be faced head-on if strategies are going to achieve their intended result. Let’s talk about leadership and ownership in driving the successful implementation of strategy.
According to a Harvard Business Review article by Ron Carucci, there are four primary reasons why leaders fail at strategy execution:
1. They manage internal issues versus strategy. Seventy percent of leaders spend maybe one day a month on strategy, and their leadership teams spend less than one hour discussing strategy. In other words, leaders spend too much time managing and not leading.
2. They fail to understand that strategy is about choices. Sixty percent of leaders fail to link their strategies with their budgets, guaranteeing a major alignment issue. This lack of alignment not only clouds their focus, but results in the lack of investments in resources necessary for the implementation of strategy.
3. They hold onto myths and ineffective organizational designs. It’s impossible for any leader to successfully drive implementation of strategy when they fail to architect organizational systems that align with what the strategy requires and hold onto myths about the organization that keep too many looking in the rear-view mirror instead of the road ahead.
4. The emotional toll is too much. In my soon-to-be-released book, “Leading from the Edge,” a key difference between what I call "Edge leaders" and what I refer to as "Center leaders" is that the Edge leader can and does make difficult choices and does not procrastinate when hard choices have to be made.
As important as leadership is in driving the successful execution of strategy, the lack of ownership for strategies is an equal and, in many firms, greater reason why strategy execution fails. There is a world of difference between someone taking on the task of executing a strategy that’s assigned to them versus one that they willingly and emotionally own. The first is a task, the second is a committed passion.
Ownership is a choice someone makes, like deciding to own a home versus renting. Ownership brings a certain strength of commitment that renting does not. If you own your home and the landscaping does not add curb appeal, you do something about it. If you rent, you might be bothered a bit, but will not make the investment in new landscaping. After all, you don’t own the home.
Firm leaders mistakenly assume that if a partner is asked to be responsible for the implementation of a strategy, the partner will put the energy and focus behind it to get it done. After all, the partner is an owner. The problem is confusing partnership with ownership. Just because someone is a partner does not always result in the mindset of an owner. As a leader of a firm, how many times have you heard or expressed the frustration that partners act like employees? Making someone a partner does not and never has created a true sense of ownership in the firm. What it does is the partner’s attitude and choice to be, act and accept the responsibilities of ownership.
The key to the successful execution of strategy is for individuals to step forward and choose ownership of implementation, not wait to be assigned the task. If you’re the firm leader, you know which partners and senior staff act like and reflect the mindset of ownership, and those who do not. Choose implementation leaders based on their attitude and passion surrounding the strategy, not for any other reason, and the execution of any strategy will be successful.
Before you give someone responsibility for the implementation of a key strategy, ask the following questions and decide if this is the right person to lead this initiative:
- Why is this strategy so important to the firm?
- Why is this strategy so important to you?
- Why do you want the responsibility to implement?
Pay attention to how these questions are answered, as they will clearly identify an individual who will own the implementation, versus an individual who only sees it as a task. Then your strategy execution will be successful every time.
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February 12, 2021 at 01:00AM
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Lack of ownership represents a major misstep in strategic planning for accounting firms - Accounting Today
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