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Introduction to the Eat What You Kill MODEL Vs. the Building a Village Model. Bill Reeb, CPA, CITP Dom Cingoranelli, CPA, CMC Succession Institute, LLC. Learning Objectives. Recognize differences between the Eat What You Kill and Building a Village business models at CPA/CA firms.

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introduction to the eat what you kill model vs the building a village model

Introduction to the Eat What YouKill MODEL Vs.the Building a Village Model

Bill Reeb, CPA, CITP

Dom Cingoranelli, CPA, CMC

Succession Institute, LLC

learning objectives
Learning Objectives
  • Recognize differences between the Eat What You Kill and Building a Village business models at CPA/CA firms.
  • Identify operational modes commonly found at CPA/CA firms and their correlation to the Eat What You Kill and Building a Village business models.
  • Recognize pros and cons of the Eat What You Kill and Building a Village business models.
  • Identify practice management considerations associated with business model selection.
  • Review a short Case Study as to why managing equity is critical to the firms future success
eat what you kill model
“Eat What You Kill” Model
  • Natural Hunters
  • Strong Personalities
  • Add People to Assist the Hunters
  • The Classic Entrepreneur – they want to have their hands in every aspect of the process (hunting, skinning, food preparation, cooking)
  • Only the Strong Survive
building a village model
“Building a Village” Model
  • Focus on making the mostout of the talent within village
  • Specialization of Roles and Responsibilities
  • Constantly narrowing the roleof the Hunter and removing him/her from as many processes as possible
  • Building more processes, support, methodology and infrastructure
cpa firm modes of operation sm

CPA Firm Modes of Operation SM

From Survival to Continuation Modes

eat what you kill and building a village
Eat What You Kill and Building a Village

Eat What You Kill


the struggle between success continuation
The Struggle: Between Success & Continuation

Eat What You Kill

Building A Village


Safety Net



distinctions between the eat what you kill building a village models
Distinctions between theEat What You Kill & Building a Village Models
  • Developing Leadership
  • Creating a viable & enduringchain of command
  • Developing systems toreward desired behavior
  • Developing a culture thatfocuses on developing people and closing competency gaps at every level
  • Making it everyone’s job to be grooming their replacement. Without a replacement, everyone gets stuck in their current role
make sure your governance model supports the change you need to make

Make Sure Your Governance Model Supports the Change You Need to Make

Who Decides What and How Do They Decide?

(Who Is in Control?)

governance is so critical
Governance Is So Critical
  • The biggest single weakness of many small to midsize firms is lack of effective governance
  • This is all about decision making authority
    • Who decides what, and how do they do it?
    • Are the right people making the decisions based on the roles they fill, or can everybody act as managing partner for any particular day?
    • And who can hold whom accountable?
decision making authority
Decision Making Authority
  • Force accepted change through mandate?
    • Voting Control
    • Organizational infrastructure (roles, responsibilities, organizational chart)
  • Distributed individual authority, powers and limitations
    • Board of Directors – (establishstrategic direction, budgets, policiesand procedures)
    • Management Team/CEO-implement plan
books of business

Booksof Business

Issues and Obstacles

book of business obstacles
Book of Business Obstacles
  • Gap in Book Size should be minimized (Small Book):
    • Very little leverage ($600-$750k typically). Partner does a great deal of the technical work
    • Lower Realization because wrong person is doing the work
    • Little staff development and inconsistent utilization because partner is the work horse
    • Partner does not spend enough time developing client relationships
    • No excess capacity to take on more work (can’t grow if everyone is maxed out/often add new partners when shouldn’t)
    • Over-served clients (teaches small clients their work is worthy of a partner doing it – creates transition problems)
    • Few firms will want to buy these over-served books or when they do, they will do so at a deep discount
book of business obstacles1
Book of Business Obstacles
  • Large Book partners tend to delegate the project management and spend more time developing client relationships across all services
    • They tend to abuse delegation. Rather than develop managers and staff, they typically delegate their project management to a junior partners which sets in motion a stifling and damaging environment
    • These partners tend to hoard client management even though they have passed off almost all of the responsibility to others which then creates the situation where many of their smaller clients are underserved or even ignored (stifles firm growth and puts the client relationship at risk)
    • Younger partners are often relegated to the role of manager because of the workload passed to them by senior partners. This destroys realization and leverage because of improper resource management
    • Because junior partners often fill the role of manager, the real seniors and managers are poorly developed and too large a gap in talent evolves between partners and staff.
    • The younger partners always get criticized for not acting like a partner when it is the senior partners that set them up and perpetuate the system
book management
Book Management
  • The Firm must Focus on Closing the Gap between Partner’s Books.
  • This means Partner Compensation Has to be Addressed for this to Happen
  • You Need to Believe that, Purely because of Demographics, it is time to Start Building a Business Infrastructure that Will Support Partners Being Able to Manage a Doubled Book Size in the next 5 Years and Being Able Manage a Tripled Book Size in 10.
  • You Need to Address What a Partner’s Roles and Responsibilities are
partner roles and responsibilities

Partner Roles and Responsibilities

What Should Partners Really Be Doing?

classifying clients
Classifying Clients
  • An “A” client is often defined as one of 15% to 20% of the clients that make up 70% to 80% of the firm’s revenues.
  • A “B” client is one that you are right now most likely under-serving, but has an opportunity to generate sizable revenues for your firm.
  • A “C” client is a client that does not have much additional service opportunity other than what you already do, and the revenues generated are small.
  • A “D” client could seemingly fall into ANYof the classifications above.
basic partner roles responsibilities
Basic Partner Roles & Responsibilities
  • Partners are responsible for client account management, including:
    • Maintaining client satisfaction with, and loyalty to, the firm
    • Continuously updating their understanding of client’s priorities
    • Meeting with “A” clients at least 4 times a year, “B” at least 2 times a year
    • Identifying additional services that would be beneficial to those clients
    • Provide a high-level oversight of the work performed for those clients
    • Pass down the regular contact and billing/collecting responsibilities of “C” clients and potentially some low level “B” clients to managers
    • Pricing projects above firm established minimum levels of realization
    • Billing and collecting fees
    • Focusing on developing people and building a right-side up Pyramid
    • Maintain a constant connection with key referral sources
    • Implementing firm strategy
partner responsibility
Partner Responsibility
  • Relationship Management is the Primary Responsibility of A Partner!!!!!!
  • Because if the Partner is Not Doing this … who is?
technical partners roles responsibilities
Technical Partners Roles & Responsibilities
  • This is a person in the firm that is highly technically competent and their professional focus is on:
    • being the firm’s preeminent resource in specific technical areas,
    • providing advice and council to other partners (and staff) in those technical areas,
    • taking on the oversight and project management of the firm’s most complex technical work,
    • oversight of quality systems, processes and training to ensure technical standards are maintained regarding the firm’s work product.
  • Can a partner be both a technical partner and a client relationship partner? “Yes”; 2/3rds CR, 1/3rd T
  • As firms grow larger, they can begin to afford the overhead of maintaining technical-only partners.
  • Unfortunately, the reality of most CPA firm partners is that they provide lip service to their role of client relationship partner and bury themselves in their role of technical partner.
common sops driving change

Common SOPs DrivingChange

Standard Operating Procedures

what is your client acceptance process
What is Your Client Acceptance Process?
  • Who can decide what business you take on?
  • What process is followed to insure you are taking on profitable business?
  • Who verifies the availability of staff/resources to avoid constant workload compression?
  • How is all of this information communicated, and to whom?
  • What about new work from existing clients?
  • How are you weeding out marginal clients? Who can make that happen?
without marketing sop you are looking for problems
Without Marketing SOP, You are Looking for Problems
  • Without systematizing marketing and investing in marketing processes, your firm will find a difficult time breaking through that barrier to the next level
    • Service businesses, especially professional service businesses, are predominantly referral driven
      • New clients through referrals from clients, friends or professional relationships.
      • Educating your clients as to the diversity of service you offer so you can increase “share of wallet” when appropriate
    • It takes more of a firm-wide effort to make an impact with every new dollar of growth
    • It’s about partners and managers being required to live up to the firm’s job descriptions rather than their individual definitions
services offered
Services Offered
  • Your firm CAN’T afford to ALLOW partners to build island services
    • Services need to be synergistic
    • All services need to be built to support staffing, or shut them down now
      • Technology
      • Wealth Management
      • Litigation Support
      • Business Valuation
compensation systems framework
Compensation Systems Framework
  • Compensation should be based on firm strategy and changed accordingly.
  • Compensation systems should be built to reward behaviors you want, offer incentives for changes needed, and penalize actions you want to stop.
  • Compensation systems should highly-compensate exceptional people, reward good people, and drive off marginal ones.
critical success factors

Critical Success Factors

Common SOPs Driving Change

critical success factor
Critical Success Factor
  • You have to unbundle:
    • Ownership (voting and governance)
    • Compensation, and
    • Retirement
critical success factor1
Critical Success Factor

The Stronger the Individual usuallythe Weaker the Organization

critical success factor2
Critical Success Factor

If the Only Person you can develop is Yourself, You are of Limited Value to an Organization

basic issues
Basic Issues
  • The roles and responsibilities need to be defined
  • Client Service Partners versus Technical Partners; Supervisory Managers versus Technical Managers
  • Goals – both objective and subjective need to be establish annually
  • Someone has to be empowered to hold the everyone accountable
staffing and organization

Staffingand Organization

Taking Care Of Your People

most organizations build systems
Most Organizations Build Systems:
  • That are designed around each individual in the organization
  • Each person is like a puzzle piece – the puzzle doesn’t work without each person filling their role
  • That fail when key people leave
  • That are built around short-term efficiency rather than long-term effectiveness
what firms look like from a capacity perspective
What Firms Look Like from a Capacity Perspective:
  • Some firms look like a funnel froma capacity standpoint, with partners/owners atthe top, managers in the middle and staff at the bottom.
  • Some firms look like an hour glass froma capacity standpoint, with partners/owners,then it shrinks to the smallest size aroundmanager, then larger for staff
  • The organization that has the mostleverage and flexibility is kind of apyramid, with capacity growing witheach level from partner/owner on down.
  • You have to understand the organization’s strategy to manage the people function.
  • This applies to developing:
    • Skills, abilities, competencies required of people at different levels within the organization
    • Where to find/how to develop those people with the desired skills, abilities, competencies
  • Without this context, how do you decide where to put your resources?
  • Without this context, how do you decide to structure the organization?
steps normally taken

Steps Normally Taken

To Get From Here To There:

Moving from EWYK to BAV

you typically have to address retirement if you want the power brokers to be willing to change

You Typically Have to Address Retirement If You Want the Power-Brokers to be Willing to Change

Create The Security Needed to Embrace Change


Because if you do away with the importance of generated book, which often drives the current retirement benefit calculation as well as heavily impacting compensation, it will never get the votes to pass without putting in some protections for the effort/work that has already occurred under the current system

equity reallocation is often a requirement to move forward

Equity Reallocation is Often a Requirement to Move Forward

Who Should Own What Share of Your Equity?

  • Because you want Client Service Partners driving the firm, not Technical Partners
  • Marketing runs business. It doesn’t matter who has built the best mouse trap; it is about whether your clients and prospects know that you have a quality mouse trap available to sell them
  • In the end, long-term success is always about client service and client satisfaction. Today’s client expects far more from their service professionals than just being technical competent
cingoranelli and reeb case study
Cingoranelli and Reeb Case Study

Current Information

  • Founded in 1983
  • Currently about $4.2 million in Revenues
  • 25 Full Time Equivalents
  • 5 Partners (2 founders, 3 junior partners)
cingoranelli and reeb case study1
Cingoranelli and Reeb Case Study


  • Well known, constantly networking
  • Passes off a lot of his clients
  • Okay technically, but relies on other partners to do the work
  • The managing partner, but passes off almost all of the day-t0-day work to the firm administrator
  • Good client developer, visionary, and motivator
  • Has a book of $1.8 million
  • Is 65 years old and going to retire in the next year
cingoranelli and reeb case study2
Cingoranelli and Reeb Case Study


  • Has a great reputation and well known in the community
  • Walking tax library
  • Clients love him
  • Only works with a couple of hand picked people in the firm and does the rest himself
  • Works a lot of hours
  • Has a book of $1.1 million
  • Is 63 years old, planning to retire at 66, but would like to work until his mid-70’s
cingoranelli and reeb case study3
Cingoranelli and Reeb Case Study


  • He is good technically and a workaholic
  • Practically lives at the firm during tax season
  • Even outside of tax season, he logs more hours than anyone else (Reeb a close second at times)
  • Tough on people, but is excused because of the stress and workload he carries
  • $600k book (mostly transferred to him by Cingoranelli), but is key producer on at least $500k additional from Cingoranelli’s book
  • Expects to be MP once Reeb is forced to retire
  • Is 53 years old
cingoranelli and reeb case study4
Cingoranelli and Reeb Case Study


  • Showing real talent working with clients
  • Has done a good job networking and has brought in a number of new clients (Cingoranelli gave her about 100k, she brought in the rest)
  • She spends a lot of time developing staff
  • Staff tends to go to her first with questions even thought Cameron is more technically proficient
  • Has a book of $450k
  • Is 44 years old
cingoranelli and reeb case study5
Cingoranelli and Reeb Case Study


  • Was quickly fast-tracked to partner
  • Good technical skills (about the same as Winters)
  • Reasonable people skills (between Cameron & Winters)
  • Not shown any interest in developing new clients
  • She brought in about $100k of clients when she joined; Cingoranelli has given her the rest
  • Martz just had a young son, part-time at 30 hours a week, committed to full time when her boy starts school
  • Has a book of $250k
  • Is 42 years old, currently part time (about 30 hours a week)
cingoranelli and reeb case study6
Cingoranelli and Reeb Case Study

Current Partner Information

Name Age Book Size

  • Cingoranelli (Client Service Partner) 65$ 1,800,000
  • Reeb (Client Service Partner, with Technical Partner tendencies) 63 1,100,000
  • Cameron (Technical Partner) 53 600,000
  • Winters (Client Service Partner) 44 450,000
  • Martz (Part Time Partner) 42 250,000
cingoranelli and reeb case study7
Cingoranelli and Reeb Case Study

Current Equity Ownership Status

Name Ownership

  • Cingoranelli 35%
  • Reeb 35%
  • Cameron 15%
  • Winters 10%
  • Martz 5%
cingoranelli and reeb case study8
Cingoranelli and Reeb Case Study

Pro rata Distribution when Cingoranelli Retires

Name Ownership

  • Reeb 53.85%
  • Cameron 23.08%
  • Winters 15.38%
  • Martz 7.69%
cingoranelli and reeb case study9
Cingoranelli and Reeb Case Study

Pro rata Distribution after Reeb Retires

Name Ownership

  • Cameron 50.01%
  • Winters 33.33%
  • Martz 16.66%
it is about working on your business
It is About Working “On your Business”
  • It’s about finally takingthose steps you haveknown you needed totake for years
  • It’s about making“you” less important
  • It’s about choosing thebest model and mode for your organization and making it work
  • It’s about constantly managing change and providing the appropriate leadership
thank you for your time
Thank You For Your Time!

Bill Reeb, CPA, CITP

Dom Cingoranelli, CPA, CMC

Succession Institute, LLC

Phone: 512-338-1006

Bill’s Email:

Dom’s Email: