Strategy Is The Bigger Picture

Strategy comes from the Greek word ‘strategos’, meaning the art of planning and conducting a war. 

From military origin, it is now used in both the political and business arenas.  

The basis of strategy is to establish preferred conditions for operations against the enemy. 

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“Tactics is the art of using troops in battle; strategy is the art of using battles to win wars.”

Looking at the business world as a whole there are 2 common strategic approaches which companies adapt:

1. Rigid approach: to remain competitive its about low cost or differentiating your product
2. Flexible approach: more important to be agile & creative to navigate through fast changing environments

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Not surprising the flexible approach is more sustainable than the rigid approach.

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Narrowing in on an actual business, we learn another 2 common ways strategy is used to achieve goals and objectives:

1. Operational effectiveness - increasing efficiency
2. Competitive strategy - performing activities different than rivals 

Typically, the larger a business grows the more focussed the owners become on the bigger picture (be it rigid or flexible).

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With that, the more separated they become from the running of operations and how activities are actually being performed.  This task sits with management who are held accountable for performance and optimizing activities being carried out.

It’s a growing requirement for management to diligently report to owners on the financial position and potential efficiencies that can be unlocked for the business. 

Quite often management are not equipped to best communicate the challenging relationship between operations and a fast changing environment to the owners. In many case, too much critical information is not accurately states or is lost in translation.

This is borne from not having the best scientific methods and tools for analyzing, measuring and forecasting on various scenarios that ensure the optimal strategic path is always being followed.

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Enter the Accountant of Tomorrow...

Without question the best placed stakeholder to put together strategic plans for owners.

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This enables the owner to remain focussed on the bigger picture without falling out of touch about where they are, where they're headed and how long it will take them with the existing strategy.

Here is how a typical strategic plan is structured for a Company:

Where is the company today

• Internal audit to assess accuracy of reported numbers 
• Review of tax efficiency
• Diagnostic review of internal operations i.e. management report on split margins 
• Internal KPI mapping against industry benchmark 
• Analysis of external influences that affect performance i.e. industry, compliance, competitors 
• Review of product or service offerings against market demands

Where is the Company headed and how long will it take

• Extrapolate out P&L / BS / CF for 24 months using historical averages
• Document discussions with senior management on frustrations / inefficiencies
• Ask senior management for thoughts on strategic direction - look for alignment
• Review current market share and size.  What is growth opportunity in current market
• Review adjacent markets or new locations for new opportunities
• Help owners to develop an overall vision and mission to fuel management Belief
• Communicate a 12 to 24 month goal with senior management aligned with new vision

How will the Company get there

• Perform cost benefit analysis on every product or service channel (no blended margins)
• Review all advanced tax saving initiatives that could be implemented to better position
• Define cost saving initiatives to drive more operational efficiency (without hampering performance)
• Explore how to perform operations in different ways 
• Technology audit - research all areas of the business for SaaS products that actually work and could shorten the value chain
• Map out scenario analysis report using high low assumptions model

How will the Company implement the strategy

• Review and validate with senior management what changes from above can be made, how long it would take and what outcome can be expected
• Define new milestones that are to be achieved within 12 months   
• Introduce key performance measures that focus on new milestones 
• Reallocate resources within business (includes people) to support new strategy

The Accounting industry is experiencing a big shake up as we see the traditional firms die out or evolve to the new way of working with clients and EARN A LOT MORE.

Once you know how to map out the above for your target market, it’s time to fill your pipeline with high calibre businesses ecstatic about your offer and the specific benefits they can expect.

If you're interested in learning how to evolve to an Accountant of Tomorrow then click here and book in for a one on one with either myself or an executive from my team. 

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To your journey,

Anthony