Focusing on a single area of improving your business is always going to be worthwhile. However, to really make an impact, you need to take a balanced approach and spread your efforts across multiple areas at once.
This approach, which is referred to as systems thinking, is one of nine key insights identified in Karbon’s recent report, The Business Ability of Accounting Firms, which reveals the core weaknesses and progress of 250 accounting firms across the globe that were assessed through our Practice Excellence Scorecard.
As Ian Vacin, VP of Education, explains in this video, all 250 accounting firms who took part in the assessment were broken down into four even quartiles based on their overall score:
Q1: Traditional (bottom 25%)
Q2: Transitioning (25 - 50%)
Q3: Expanding (50 - 75%)
Q4: Leader (top 25%).
Comparing the average scores of accounting firms across the four pillars of Practice Excellence (Efficiency, Strategy, Growth and Management), shows what changes the most as a firm’s overall Practice Excellence score increases.
To move from Traditional to Transitioning, the biggest advancement is in Efficiency. Management is what improves most to reach the Expansion stage. And Growth, in conjunction with Management, is the big move for firms that are classed as Leaders.
These changes highlight what the main focus for each group is during different stages, as they become more proficient overall. Different drivers are needed for a firm to progress, depending on their current ability.
However, firms do not favor one area too much. None of these changes are significantly greater than the rest. This highlights the systems thinking approach that is occurring.
No aspect of Practice Excellence is truly more important than the other. A holistic approach to the collective set of competencies is needed to progress a firm forward. While the focus can be on one specific area at first, like a technology strategy for example, things balance out quickly. This is also evident when analyzing results across specific segments.
The focus should not be on a single competency but rather on the mix that is optimal to move from one stage to another.
Download your copy of The Business Ability of Accounting Firms for all the insights from Karbon’s Practice Excellence Scorecard. You can also take the free Practice Excellence Assessment to receive your own personalized scorecard and see how your firm compares.