The Finance Side of Goals and Compensation

Man counting $100 bills into three pilesRemember the "one firm" concept is at the core of this discussion.

By Bill Reeb

Previously we reviewed the goal-setting process, including which person or group should orchestrate which parts of it. Now we will conclude the discussion by walking through the financial side of assessing goal accomplishment and how it works when considering actual firm profits.

MORE: The Partner Comp Battleground | If You Don’t Eat What You Kill, What Do You Eat? | 3 Ways to Emphasize the One-Firm Concept | 8 Steps for a Successful Change Process | Building Competency on Every Level | Change Happens: How to Master It.
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Let’s start with some statistics from our latest Succession Planning survey, which we did in partnership with the AICPA’s PCPS. The following tables show information regarding compensation systems, broken down by size of firm (by full-time equivalent [FTEs] which includes everyone, from administrative to staff to partner): READ MORE →

The Partner Comp Battleground

Businesswoman holding giant dollar symbolWho decides and how, including setting and monitoring goals.

By Bill Reeb

Previously we reviewed the goal-setting process, introduced how the managing partner should orchestrate the partner goal-setting process and discussed why the goals should be based on normal expectations of any partner rather than on the exceptional performance of a specific partner. Now let's discuss who is in charge of what parts of the compensation-setting process and more.

MORE: If You Don’t Eat What You Kill, What Do You Eat? | 3 Ways to Emphasize the One-Firm Concept | 8 Steps for a Successful Change Process | Building Competency on Every Level | Change Happens: How to Master It.
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Who’s in charge of what parts of compensation?

Once the decision has been made to implement systemic changes to hold partners accountable to specific performance expectations rather just relying on everyone to put in a self-proclaimed “good day’s work,” the next battleground is how compensation is determined and who is responsible for which parts of the process.

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If You Don’t Eat What You Kill, What Do You Eat?

Credit: Telberg photo

Clearing up confusion over partner compensation in the one-firm concept. BONUS: The four phases of goal-setting.

By Bill Reeb

We are picking up this column with the goal-setting process. After we have this discussion we can move to the next phase, which is reviewing how we would evaluate the actual performance outlined below, and how that performance assessment would impact pay, assuming the firm was on budget, over budget, or under budget.

MORE: 3 Ways to Emphasize the One-Firm Concept | 8 Steps for a Successful Change Process | Building Competency on Every Level | Change Happens: How to Master It.
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Accountability for Partners

For partners, accountability is best described as having a system in place that rewards partners for following processes and procedures, living up to their roles and responsibilities, and implementing the firm’s strategy. And on the other side, it provides sanctions when partners don’t do the above.
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3 Ways to Emphasize the One-Firm Concept

Large rocks in road... and 8 likely obstacles.

By Bill Reeb

In the past, we've written a multi-part series on partner compensation that started out discussing the following:

  1. The Eat What You Kill (EWYK) model of operations and how that impacts partner compensation
  2. The most common criteria used in EWYK partner compensation formulas
  3. The Building a Village (BAV), or one-firm concept, model of operations and why partner voting has to be addressed to clear the way for changing partner compensation
  4. Addressing the retirement issue and separating it from partner compensation so that you are finally positioned to create a BAV partner compensation model

MORE BILL REEB: 8 Steps for a Successful Change Process | Building Competency on Every Level | Change Happens: How to Master It.
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Based on our experience, these are all issues that need to be discussed and addressed before a firm WILL make the decision to move from an EWYK to a BAV compensation system.
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8 Steps for a Successful Change Process

Gold pyramid etched with symbolsPlus 4 common attacks to anticipate.

By Bill Reeb

We pick up in Part 3 of this column series with some additional changes in best practices that will help you better focus your talent on what is truly important to the firm’s future.

Parts 1 and 2: Change Happens: How to Master It. | Building Competency on Every Level
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As well, we will review a few simple change management strategies and approaches to propel the successful changes and transformations you and your organization desire to make. So, let’s get started.
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Building Competency on Every Level

diagram
Work is passed down to the next level once the saturation point has been reached.

Including 3 key initiatives in most strategic plans.

By Bill Reeb

Let's discuss how firms need to alter their thinking as to what best practices might look like near term to better position themselves for the future that is almost here NOW.

MORE: Change Happens: How to Master It.
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First of all, which I have covered numerous times before, we have to truly address from a workload perspective the prevalence of the Upside-Down Pyramid™ in firms.
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Change Happens: How to Master It.

What's next: "Smart" helmets powered by AI and AR.

By Bill Reeb

"Change” isn’t something you are expected to do once in a while anymore, but rather, “change” is something we are asked to do constantly.

MORE ON PERFORMANCE MANAGEMENT: What Happens When You DON’T Push Work Down | Why You Must Constantly Push Work Down
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Even while one change is in process, we often are asked to start another change.

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6 Time Management Tips for Remaining Unstuck

Number 6Achieve, don't overachieve.

By Bill Reeb

As I have said before, overachievers tend to

  • be overly optimistic about how efficiently they can accomplish any particular activity or
  • take care of themselves only after everyone else on their list has been satisfied.

MORE: Reality Check: Can You Hit Your Goals? | Aligning What We Think with What We Do | What Is the Best Use of Your Time Right Now? | Shrink the Gap between Strengths and Weaknesses | Be Ready to Forgive Yourself | Time Passes Anyway | Duty: A Tough Hurdle to Overcome | You Are Right Where You Are Supposed to Be | Become Your Mind’s Lead Programmer | How ‘Take What’s Given’ Works in Business
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Therefore, while overachievers accomplish great things, they often find themselves stuck because they are suffering from a disconnect between their commitments and available resources.
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Reality Check: Can You Hit Your Goals?

Businessman pole vaulting toward his goalAn exercise to help you perform a self assessment.

By Bill Reeb

Everything in my posts is designed to help you become more aware of yourself, more aware of how you both propel and sabotage your own desires and efforts, and how to better harness the power of momentum into progress.

MORE: Aligning What We Think with What We Do | Don’t Be Someone Else’s Rug | Are You a Box or a Funnel? | Tension Impacts Performance | Your Perception Will Shape Your Experiences | For CPAs: The Road to Wisdom Is Paved with Failure | Being Judgmental Is Self-Destructive | 3 ‘Letting Go’ Actions to Help You Get Unstuck | Get Better, Work Better, Right Now | Constantly Build on the Basics | From Martial Arts to Business: 5 Steps of Evolution | Expect and Embrace Failure Anytime You Do New Work | Determining Your Desires Should Be an Active Process | Know Where You Are Running To | Let Go of What You Think You Know
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Aligning What We Think with What We Do

Two metal balls balancing at each end of seesawIf you're "behind," then "don’t try to eat the entire elephant in one bite."

By Bill Reeb

Look for disconnects between what you think and do. And when you find yourself taking an action that contradicts the way you have been thinking, take a moment to figure out why there is a disconnect.

MORE: Don’t Be Someone Else’s Rug | Focus on Changing Yourself (Not Everyone Else) | How a Strength Can Become a Weakness | Tenacity and Persistence: Friends or Foes? | Don’t Let Worry Consume You | Guilt vs. Duty | Being Judgmental Is Self-Destructive
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When your actions and thoughts are not in congruence, know that you are setting yourself up to get stuck. Doesn’t it make sense that a major source of dissatisfaction can occur anytime you are thinking one way yet acting another? If we can’t be honest with ourselves, how can we ever expect to know who we really are and what is really important to us?
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Don’t Be Someone Else’s Rug

Businessman with hand extended in "no" gestureThere's almost always a win-win available.

By Bill Reeb

In the ’70s, there was a big movement in business culture to learn to be more assertive, aptly called “assertiveness training.” Michaelle was quick to enroll because this was an important skill set to call upon, especially with many women moving into jobs that had historically been held by men (Michaelle was a systems engineer with IBM during this period). The concept was simple: “You need to speak your mind, ask for what you want, demand what is fair and don’t let yourself be a rug for everyone to step on.”

MORE: Focus on Changing Yourself (Not Everyone Else) | What Is the Best Use of Your Time Right Now? | Shrink the Gap between Strengths and Weaknesses | Be Ready to Forgive Yourself | Duty: A Tough Hurdle to Overcome
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In our early years working at IBM together, when one of the secretaries needed to step away or take a  break, she would often come over to Michaelle and ask her to cover with typing, answering the phone and so on. In addition to the fact that she held the professional job of being a systems specialist, Michaelle also had earned her undergraduate degree in psychology and an MBA with a concentration in accounting. I just had a bachelor’s degree in business – far less educated – yet no one ever asked me to fill in.
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Focus on Changing Yourself (Not Everyone Else)

Young black businessman looking at his reflection2 key takeaways.

By Bill Reeb

“Focus on changing you” is an important technique to embrace. For your life to change in a meaningful way, it is about you changing – not anyone else.

MORE: What Is the Best Use of Your Time Right Now? | Are You a Box or a Funnel? | Tension Impacts Performance | Your Perception Will Shape Your Experiences | For CPAs: The Road to Wisdom Is Paved with Failure | Fear Stifles You in Every Way | Change the Way You Think
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While this sounds cliché, it is absolutely true. As a consultant, I work with organizations helping them with everything from improving operating processes to succession. Because every project I am involved in requires me to deal with a number of different personalities, if I want the client to achieve a successful outcome, it becomes critical for our team members to understand the following premise:

Change occurs when you change!

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What Is the Best Use of Your Time Right Now?

Meditative businessman is pondering time management while surrounded by alarm clocksA simple way to focus your priorities.

By Bill Reeb

All of us, no matter what our income, gender, race, religion, origin, have the same amount of time – 24 hours in a day, 365 days in a year. Each of us has the same capacity. The question is how we use it.

MORE: Are You a Box or a Funnel? | How a Strength Can Become a Weakness | Tenacity and Persistence: Friends or Foes? | Don’t Let Worry Consume You | Guilt vs. Duty | Being Judgmental Is Self-Destructive | 3 ‘Letting Go’ Actions to Help You Get Unstuck
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For most of us, you can carve out roughly 3,000 of those hours for sleep. Even if you don’t need eight hours, you need some time to sleep, and that number cuts a big hole into your available capacity.
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