Accounting and Consulting

Stretch time

By Kristy J. O'Hara

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Ken Baggett
CEO and managing principal, Reznick Group PC

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Five years ago, Ken Baggett stood before Reznick Group PC’s partners and unveiled a goal to become the 10th-largest accounting firm with 10 offices over the next 10 years — a huge stretch for a company that was, at the time, a $70 million regional player.

“I’ll never forget, one of my partners said, ‘You’ve lost your mind,’” Baggett says. “I knew buy-in was not there yet.”

Over the next year, this CEO and managing principal worked to get that buy-in. And when Baggett presented the following year, the firm had progressed so much that he recast his 10-year projections. This time, that doubting partner asked if Baggett was being a bit conservative. Today, the firm has reached that initial goal of 10 offices, and in 2007, it posted revenue of $230 million.

“It takes a little time when you have a stretch goal to get people to believe you, and you have to continue to preach it until they do,” he says.

Smart Business spoke with Baggett about how to get buy-in for massive goals.

Use your leaders. I don’t always formulate the plan myself. Sometimes it comes from others who say, ‘What do you think about this?’ and we’ll sit down and bat it around.

First, you have to get a small group. You will not get buy-in to something by doing it large scale. Get that smaller group, and let them go out. Be strategic in who you pick.

You have to pick people who will be recognized as leaders already. They’re already go-to people. You say, ‘Gosh, they’re the busiest people,’ but they will still rise to the occasion.

Share history and trends. This was a mistake that I made. I had done the analysis of the history, but I didn’t share that with the partners because you assume everyone knows your history.

When that guy stands up and says, ‘You’ve lost your mind,’ I said, ‘There’s something missing here.’ I re-presented the strategic plan and said, ‘Guys, if we grow at the same 15 percent pace that we have the last 12 years, we will exceed this goal.’ Then people went, ‘Oh, OK. You’re not out to lunch.’

Study your history. There’s a reason we all study history, and it isn’t to tell nice stories — it’s so we can either predict that future or try to not replicate the mistakes.

Now, if history isn’t in your favor, think another methodology. Maybe it’s the rest of the industry. The industry has grown, let’s assume, from an average of 10 percent over the last 10 years. We’ve grown at 6 — we can certainly be better than average.

If everyone’s averaged 10, don’t play to be average. Therefore, you look around the room and you say, ‘Everyone else has been able to do this. What has hindered us from that?’

Use the industry, No. 1, and then benchmark against other peer group people. Don’t benchmark the guy who’s doing 7 — benchmark against the guy who’s doing 15.