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Implementing Value Pricing: A Radical Business Model for Professional Firms by Ronald J. Baker

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CHAPTER 23

Firm-wide Key Predictive Indicators

Everything should be made as simple as possible, but not simpler.

—Albert Einstein

Developing KPIs is a metastrategy—that is, a strategy for defining strategies. They need to be intimately linked with the firm’s value proposition, as well as quantitative measurements, or—and this is even more important in knowledge firms—qualitative judgments. They should have a common definition and be understood across the entire firm, with no ambiguity, similar to the Continental example from Chapter 22.

Having your entire team focused on KPIs not only gets the right job done daily, it also gives them a sense of commitment to the process of improving how that job gets done. Since the front lines are at the coal face observing actual customer behavior, they know which processes work and which cause frustration, and can readily suggest improvements to make the customer experience more enjoyable. This process must be based on observed reality, and it must make sense in explaining actual customer behavior, not illusions or specious conclusions.

KPIs for a Professional Knowledge Firm

According to an article in the Journal of Accountancy, CPA firms lose customers for the following reasons (Aquila and Koltin 1992: 67–70):

1. “My accountant just doesn’t treat me right” [Two-thirds of the responses].

2. CPAs ignore clients.

3. CPAs fail to cooperate.

4. CPAs let partner contact lapse.

5. CPAs do not keep clients informed.

6. CPAs assume clients are ...

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