As practices experience growth,
they become more complex

The environmental forces impacting on accounting practices today are having unexpected effects on the way they grow.

For instance, the traditional mainstay of a practice is tax and regulatory compliance, but many clients regard these services as “grudge” purchases. They use them only because they have to. As a consequence, clients are price-conscious and this makes the provision of such services highly competitive. They also take up a disproportionate amount of practice time.

To address this, many practices offer management accounting services where the quality of the service is more highly differentiated and therefore not as price-sensitive. It enables practices to form stronger ties with their most important clients and helps to pull through other services.

If a practice provides other companies with a suite of services, odds are that the companies it services are substantially bigger in terms of employee numbers and operational complexity. Clearly, the more effectively a practice is run, the sounder the advice it can give to clients on how to run theirs.

Deciding what to do is often the easy part; the hard part is making it happen. More plans fail because of an inability to execute than because of management’s inability to plan.

There are four basic reasons why the execution of plans fails to live up to the planners’ expectations. First, planning and execution are seen as two entirely separate activities, but the seeds of success or failure to execute are sown the moment planners sit down to plan.

As practices experience organic growth and grow through acquisition and mergers, they become more complex with more staff and a greater need for systems and processes to handle everything from client acquisition to internal communications.

More plans fail because of an inability to execute than because of management’s inability to plan.– Graham Haines

Second, planners spend a disproportionate amount of time deciding what they are going to do rather than dividing their time equally between that and planning how they are going to do it. The third reason is a consequence of the first two. Too few people are involved in the “how” process – assessing a plan’s feasibility and its impact on organisational resources. Fourth, there is no specific list of barriers to execution and neither is there a model against which each barrier can be indexed.

I felt that if the fourth issue could be tackled successfully, it would provide solutions to the first three as well. So I started to compile a list of barriers to execution. In the end, it numbered 36 and was divided into four categories: those relating to planning (13); those relating to execution (14); those relating to monitoring, measuring and adapting (6); and those relating to revising the plan (3). The next step was to develop a managerial framework that matched this list of barriers. The model had to meet the following criteria.

• It had to be universal in its application – applicable to any type of organisation.
• It had to separate – but demonstrate the connection between – “this is what we are going to do” and “this is how we are going to do it”.
• It had to demonstrate the interdependency within and between the three major components of planning, execution, and monitoring, measuring and adapting.
• It had to be simple, memorable, dynamic and practical.

The solution was to equate planning, execution, monitoring, measuring, adapting and revising to the construction, operation, maintenance and rebuilding of a simple wagon wheel.

The wagon wheel way

We start with the planning phase, which is akin to building the wagon wheel.

Once the wagon wheel has been constructed, the next phase is to operate it – or in this context, implement the plan.

Five requirements for effective execution have been identified. They are in order – Organisational alignment, Management of ChangE, LEadership, Teams and Teamwork and Employee Engagement, which I call the OMELETTE factors. The 14 barriers that relate to implementation are arranged in the same order as these five factors.

The world is awash with information on what to do and how to do it, but the hard part – actually putting it into practice – has been largely neglected.– Graham Haines

There is a sixth requirement for effective execution that applies to all five of them – communication. It’s the central nervous system of any organisation. Damage it and paralysis is the result. In the wagon wheel model, it’s the grease on the axle that keeps the wheel of implementation rolling with a minimum of friction.

Wagon wheels require maintenance if they are to continue to operate effectively throughout their design life. Plans are no different. Progress towards objectives set out in the plan need to be monitored and measured and the currency of the plan maintained.

Finally, events sometimes occur that strike at the very hub of the plan. In these circumstances, the only option is to revise it. The wheel has turned full circle.

Because the Wagon Wheel Way covers the complete operational cycle, it is analogous to a computer’s operating system.

Accounting packages, strategic planning, leadership or teamwork programs – these are the application software. You can see immediately where each program fits in regard to its position on the operating system.