Planning and Management Best Practices

1
Planning and Management Best Practices

• John Woodburn
• November 6, 2002
• 930 AM to 1100 AM

2
Agenda

• Introduction
• Overview of Survey
• Planning and Management Best Practices
• Firm Information
• Business Planning
• Mission and Ethics Statements
• Operational Standards and Methodology
• Employee Performance Practices

3
Introduction

• Present survey results - consolidated
• Benchmark successful organizations
• Green 10 Net Margin
• Yellow 1 to 10 Net Margin
• Red Breakeven or Loss
• Interactive
• Email address on the sign-in sheet.

4
Overview of Survey

• Population Group T members (est. 50 members)
• Focus Planning and Staffing
• Five Sections
• Firm Information
• Business Planning
• Mission and Ethics Statements
• Operational Standards and Methodology
• Employee Performance Practices

5
Overview of Survey

• Consolidated results
• 20 Group T members responded (40)
• Benchmark Results by Net Margin Categories
• 19 Group T members analyzed
• 10 (5) Green Group
• 1 to 10 (9) -0 Yellow Group
• Breakeven or Loss (5) Red Group

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Planning and Management Best Practices

• Firm Information
• Business Planning
• Mission and Ethics Statements
• Operational Standards and Methodology
• Employee Performance Practices

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Best Practices Firm Information

• Type of Firm
• 35 - not part of a CPA firm
• 35 - Associated with a CPA firm
• 30 - Within a CPA firm
• Merger Acquisition Activity (added 15 to Net
  Revenues)
• 80 were not involved in MA
• 20 were involved in MA

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Firm Information - Revenue

• Size (revenue)
• 50 - 1 to 3 MM
• 35 - 3 to 7 MM
• 15 - 7 to 10 MM
• Net Revenue Growth
• 35 - Flat or Breakeven
• 20 - 1 to 10
• 45 - 10

9
Firm Information Net Margin

• 25 - 10 Net Margin
• 45 - 1 to 10 Net Margin
• 20 - Breakeven or Loss
• 5 - Choose not to disclose

10
Green Group Analysis (Practices with a 10 Net
Margin)

• Type of firm VAR, within and associated with
  CPA firm
• Revenue Size
• 1 to 3MM three practices
• 3 to 7MM two practices
• 7 MM None
• Net Revenue Growth
• 5 to 10 - two practices
• 10 to 15 - two practices
• 15 - one practice
• Merger and Acquisition
• One practice participated in a merger/acquisition
  that added 15 to 20 to Net revenues

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Planning and Management Best Practices

• Firm Information
• Business Planning
• Mission and Ethics Statements
• Operational Standards and Methodology
• Employee Performance Practices

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Best Practices Business Planning

• Strategic Plans
• Business Plans
• Budgets

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Strategic Plans

• 90 of practices do strategic planning
• Strategic Methodology (some practices used
  multiple methods)
• 33 - Balance Scorecard
• 33 - SWOT Analysis
• Other, in-house

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Business Plans

• Written Business Plan60 - Yes40 - No

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For Practices with a written business plan

• Areas included in the plan

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Green Group Analysis (Practices with a 10 Net
Margin)

• 60 of Green Group does not have a written
  business plan

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Budgets

• 78 - Prepare and Use Budgets
• Of those that use budgets
• Tie budget to strategic and/or business plan
• Informally and loosely 60
• Not tied to a plan 30
• Formally and tightly 10

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Type of Budget
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Planning and Management Best Practices

• Firm Information
• Business Planning
• Mission and Ethics Statements
• Operational Standards and Methodology
• Employee Performance Practices

20
Best Practices Missions Ethics

• 90 have a written Mission Statement
• 50 have a written Ethics/Values Statement

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Mission Statements

• 55 train their employees on the mission
  statement
• 66 stated that the mission statement is an
  integral part of your business decisions
• 55 us the mission statement as a marketing tool
• 61 publicize the mission statement to people
  outside the company

22
Ethics/Values Statement

• 70 Interview prospective employees for values
• 40 require employee to sign and acknowledge the
  Ethics/Value Statement

23
Green Group Analysis (Practices with a 10 Net
Margin)

• All Green Group practices
• Have a Mission statement
• Train employees on the Mission statement (Yellow
  38 Red 60)
• Mission statement is an integral part of business
  decisions (Yellow 50 Red 60)

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Planning and Management Best Practices

• Firm Information
• Business Planning
• Mission and Ethics Statements
• Operational Standards and Methodology
• Employee Performance Practices

25
Best Practices Operational Standards and
Practices

• Marketing
• Sales
• Project Management
• Client Satisfaction

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Marketing

• 70 have a written Marketing Plan
• Percent of Net Sales allocated to marketing

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Sales

• Sales Methods
• Sales Goals and Performance Management
• Lead Pipeline Management
• Sales Process Management

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Sales Methods

• 70 have a formal Sales Process/Methodology
• 92 of sales related personnel are trained
• Refresher training 64 as needed 14 each for
  Quarterly, Semi-annually and 7 annually

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Sales Goals and Performance Management

• 50 have Sales quotas
• 65 have a formal Sales Plan with revenue goals
• 69 tie the Sales Plan directly to Sales quotas
  and Performance reviews
• Compensation tied to Plan attainment?

30
Lead Pipeline Management

• 75 use standard, automated system for lead and
  pipeline management

31
Sales Process Management

• Standard Methodology for

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Sales Process Management

• Fixed Fee Projects
• Follow-up/critique lost proposals
• 50 Most
• 40 Few at Random
• 10 - None

33
Green Group Analysis (Practices with a 10 Net
Margin)

• Green - Do not use sales quotas
• All Red Group use sales quotas
• All Green have formal process for Prospect Needs
  Analysis and Proposal Generation and Review
• 80 of Green follow up on Most of their lost
  proposals

34
Project Management

• 75 use a formal project planning and tracking
  methodology
• Status Meetings
• Client Billing tied to status meeting
• 60 - Always or Sometimes
• 40 - Seldom or Never

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Project Management

• Billing Frequency

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Project Management

• Software Implementation Methodology

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Green Group Analysis (Practices with a 10 Net
Margin)

• 100 use a formal project planning and tracking
  methodology
• Yellow 67 Red 80
• 100 hold status meetings at the end of each
  phase
• Yellow 11 Red 60

38
Client Satisfaction

• Formal Client Satisfaction Survey Process
• 60 Yes

39
Client Satisfaction Peer Review

• Client Advisory Board
• 90 No
• 10 Planning to implement
• Peer Review
• 20 Yes
• Performed by a peer firm

40
Green Group Analysis (Practices with a 10 Net
Margin)

• No Client Advisory Boards

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Planning and Management Best Practices

• Firm Information
• Business Planning
• Mission and Ethics Statements
• Operational Standards and Methodology
• Employee Performance Practices

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Employee Performance Practices

• Culture
• Job Descriptions
• Team Building Employee Growth
• Performance Reviews
• Compensation Practices
• Employee Satisfaction

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Culture

• Do you have a strong culture?

44
Green Group Analysis (Practices with a 10 Net
Margin)

• 80 - Strong, Uniform, and tied closely to our
  Value and Mission Statements
• Yellow 33 Red 20

45
Job Descriptions

• 90 have job descriptions
• Job descriptions defined for
• 80 all staff
• 20 Professional Staff only
• 78 give copies of job descriptions and
  expectations to employees
• 44 of job descriptions include performance
  expectations and/or metrics
• Either negotiated or pre-determined

46
Team Building Employee Growth

• 40 have formal team building practices and
  training
• 20 use tools such as Myers Briggs to improve the
  team

47
Team Building Employee Growth

• Develop employee specific career plans?
• 55 Yes
• Develop employee specific training and skill
  development plans
• 75 Yes

48
Green Group Analysis (Practices with a 10 Net
Margin)

• 100 Develop employee specific career plans
• Yellow 44 Red 40
• 100 Develop employee specific training and skill
  development plans
• Yellow 67 Red 60

49
Team Building Employee Growth

• Training budget
• 70 - Yes
• 20 - No
• 10 - it changes too much
• Individual training plans rolled up to training
  budget
• 53 - Yes

50
Performance Review

• Formal, documented, Employee Performance Reviews
• 90 Yes
• Frequency of reviews

51
Performance Review

• Employees provided copies of all evaluation
  reports
• 94 Yes
• Additional types of Performance Reviews for new
  team members
• 61 - Yes
• 360 degree evaluations
• 72 - Never
• 28 -Done periodically for some
• Employees allowed free access to their personnel
  files
• 45 - Yes

52
Performance Review

• Performance Review Process
• 50 - just boss to subordinate evaluation and
  comment
• 33 Peer-on-peer boss evaluation and comment
• 17 - Boss evaluation and comment
• Rank employees based on formal performance
  criteria and review
• 30 - Yes
• Rankings shared with employees
• 100 - No
• Compensation adjustments tied to employee
  rankings
• 67 - Yes

53
Green Group Analysis (Practices with a 10 Net
Margin)

• 80 hold performance reviews quarterly
• Yellow 13 Red 0
• 100 incorporate additional types of Performance
  Reviews for new team members
• Yellow 63 Red 20
• 60 - employees are allowed free access to their
  personnel files
• Yellow 67 Red 0

54
Compensation Practices

• Frequency of compensation adjustments
• 85 - Annually
• 15 - Upon reaching pre-determined goals
• When are they adjusted
• 65 - All at once
• 35 - Individually (e.g. hire date anniversary)
• Billing rates formally linked to compensation
• 70 - No

55
Compensation Practices

• Variable Compensation Plans
• 70 - Yes
• Who participates in variable compensation plans

56
Green Group Analysis (Practices with a 10 Net
Margin)

• None of the Green Group ties billing rates to
  compensation
• Yellow 33 Red 60

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Employee Satisfaction

• Written employee grievance procedure
• 65 - No
• Formal employee satisfaction surveys
• 20 - Yes
• Outside source to compile results
• 75 - No
• Results shared with employees
• 50 - Yes
• Results tracked from year to year
• 25 - Yes

58
Green Group Analysis (Practices with a 10 Net
Margin)

• 60 have a written employee grievance procedure
• 80 do not conduct employee satisfaction surveys

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Conclusions

• Strong culture tied to mission and values
• Strong focus on People
• Career and Skill development plans
• Quarterly employee performance reviews
• Success in the details
• Follow up on lost leads
• Quarterly performance reviews

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Benchmarking Feedback and Ideas

• Please provide your comments and ideas for
  benchmarking additional items for next year