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Setting Strategic Goals for Your Firm

Setting Strategic Goals for Your Firm

Annual strategic planning can make the difference between highly profitable, and not, firms. Here's how we do it.

Brandon Hall
February 04, 2023

Hey 👋 - Brandon here.

Happy Saturday to 749 growth-minded accountants.

It has been a few months since my last newsletter as I was working through change management which took up much of my time. My goal is to get back to a weekly schedule and deliver an email to you every Saturday. Thank you to everyone who sent me words of encouragement during my break.

Here’s one growth tip for you and your firm.

Today’s issue takes less than 10 minutes to read.

Today I’m going to tell you how I set my firm's strategy for 2023 and why it's important for each individual on my team.

Over the past few years, I've experimented with various goal-setting methodologies.

Setting clear goals drives focus and helps firm owners avoid "shiny object syndrome." But as my firm grew, I realized I needed a way to set firm-wide goals that my staff could also be a part of achieving.

Unfortunately, my prior goal-setting methods haven't worked at scale. So in 2023, I'm taking a slightly different approach.

Set Firm Goals and Cascade them Down to Staff

When it comes to setting goals, firm owners find it challenging and frequently skip the process altogether because:

Sometimes, we don't know what to focus on
We may be lacking data, so our goal is a "shot in the dark"
Strategic planning is a foreign concept and takes a lot of work
Setting goals it easy, but managing them firm-wide can be a nightmare
It is hard to create objective goals that people can be held accountable to

The good news: when you do the work to set strategic goals for your firm, you can drive clarity throughout your firm by cascading goals down to your team.

When each person on your team has 2-4 aligned performance goals of their own, and when you touch base monthly to review goal progress, you have a much higher likelihood of achieving the firm's strategic goals.

I'll share more on staff performance goals, and management of those goals, next Saturday.

The Biggest Mistake I Made Setting Goals

The biggest mistake I've ever made in setting goals is adhering to the SAAS model of setting quarterly OKRs with a target achievement rate of 70%.

First, setting quarterly goals is an administrative nightmare. Not only does our first quarter fall in the middle of tax season, but asking your team to stop what they are doing once per quarter to reset next quarter's objectives isn't practical.

And then, somehow, you have to manage all of those OKRs on an ongoing basis.

Second, the idea behind achieving 70% of one's OKRs is that an achievement rate of 100% is too easy and 50% is too hard. But in reality, I was training my team to set unrealistic expectations that would ultimately lead to failure and frustration.

In 2023, I simplified my goal-setting process.

First, What is a Goal?

Said simply, a goal is something we want to achieve.

In the past, I've used the SMART goal-setting formula to set goals. That is Specific, Measurable, Achievable, Relevant, and Time-bound.

Through experience, I've learned three important lessons:

Being vague and lacking specificity will ensure you fail to meet your goal.
A goal should be objective and have a clear measurable so that a 3rd party with no knowledge of your business can assess whether you succeeded or not.
Much of your time spent goal setting should be assessing achievability.

The most important pieces of goal setting, in my opinion, are ensuring that all staff goals are aligned with firm strategic goals, and that they are specific, measurable, and can actually be achieved.

My Simple 2023 Goal-Setting Process

First, I started with the end in mind by imagining it was December 31, 2023 and I looked back on the top 3-4 things we accomplished that made the biggest impact on the firm.

One of these things for me is "deliver a world-class experience."

But to make this a goal, I had more work to do. I needed to make it measurable and objective, and I needed to ensure we could actually achieve it.

In 2022 we utilized NPS surveys to assess client satisfaction so I focused on that data point: "Deliver a world-class experience by achieving an average 9 NPS firm-wide."

This goal can now easily cascade down to our staff to help them set individual performance goals:

Our advisory manager's goal: Achieve an average 9.7 NPS on all advisory projects
Our tax manager's goal: Achieve an average 8 NPS on all tax compliance projects
Our accounting manager's goal: Achieve an average 9 NPS on tall accounting projects

The next step in the process is to ask: can this actually be achieved?

When reviewing prior NPS data for our advisory and tax compliance team, the answer was yes. The 2023 NPS targets were slightly higher than prior year's NPS scores and our managers felt confident about the 2023 goals.

But our accounting team had a problem: we had only sent two NPS surveys in 2022 which was certainly not enough data to base a 2023 goal on.

So we modified the accounting manager's performance goal to: send out 50 NPS surveys in Q1 and then improve the average score by 15% by 12/31/2023.

The point: if you don't have prior data, you have no idea how achievable your goal is. So find a way to collect data quickly and focus on improving the baseline average.

Setting Your Firm Up for Future Strategic Planning

When you go through this process the first time, you'll realize you don't have all the data necessary to set hard-hitting goals that make sense for your firm.

For example, measuring "world-class experience" with NPS is a great first step.

But another data point that would provide more context as to whether or not we are achieving this goal is the percentage of clients who refer their friends, families, and colleagues to us.

We don't have that data because we've never focused on systematizing the collection of it.

However, in 2024 I want the ability to use this KPI.

So, one of my partner's 2023 performance goals is to create a referral system that will collect this data making it available for 2024 goal setting.

The End Result

After you go through the process of identifying the top strategic initiatives you want to focus on for 2023, and then making the specific, measurable, and achievable, your staff will be able to set their own performance goals in alignment with the firm's strategic initiatives.

You'll ensure focus and accountability by checking in with staff on their performance goals each month.

It's a low-effort 15-minute touch point, but a high ROI on your time because it keeps everyone aligned all the time.

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