Accounting Today began its annual three-day Growth & Profitability Summit in Orlando, Fla., on Sunday with a pair of insightful keynote speeches by Krista McMasters, CEO of McMasters Consulting and former CEO of top-ranked CPA firm Clifton Gunderson, and Jay Nisberg, president of the consulting firm Jay Nisberg & Associates, with both speakers highlighting the changing dynamics of managing an accounting firm and CPA practice.
McMasters discussed what it was like to be one of the few women CEOs of a major CPA firm, and the need for more opportunities for coaching, mentoring and networking for women CPAs. She shepherded Clifton Gunderson through its merger with LarsonAllen at the beginning of 2012, and retired as co-CEO at CliftonLarsonAllen earlier this year to start her own consulting firm. She pointed out that after she left CLA, there were no longer any female CEOs left at the major firms. But her final year at CLA was an instructive one.
“I learned more in my last year at CliftonLarsonAllen than in my previous 35 years,” she observed. She started with Clifton Gunderson in 1978 after graduating from the University of Illinois, and said she had a great group of partners and senior managers to work with who coached and mentored her at its headquarters in Peoria, Ill. “We were a humble firm, and we were proud of being a humble firm,” she said. She went along on peer reviews to other firms and learned how they operated, and got involved in the AICPA’s Accounting Standards Executive Committee, where she mixed with other firm leaders, most of whom were men.
But diversity has not kept pace with the times. Ten years ago, there were seven women and 150 men at Clifton Gunderson’s firm group meeting, but this past January, there were only two women, including McMasters.
She advised women to follow the advice in Facebook COO Sheryl Sandberg’s bestselling book, “Lean In,” and get more involved in their firms. McMasters pointed out that women often lack confidence at their firms.
In her speech, she gave advice to today’s firm leaders about other matters besides just diversity, including the importance of engagement, especially at the CEO level. Strategies are pretty much the same at many firms, she pointed out, but the difference is execution. “It isn’t having the smartest people,” she said. “It’s having the most engaged people.”
[IMGCAP(1)]She said it is important for firms to keep their strategies clear and simple. Partners need to set an example, but people also need to execute on the strategies. “Put support systems in place to build on what people aren’t going to do for themselves,” she said.
McMasters said she used “predictive index” tests at Clifton Gunderson to help determine what people were good at, and she said it was important to know about the “B players” at firms who carried out key functions but weren’t necessarily seen as leaders.
She emphasized the importance of getting the commitment of partners and key employees to the firm’s strategy, and to set up partner-level task forces to carry them out. Firms also need to monitor progress and realization rates for everybody, not just staffers.
McMasters criticized firms for coddling employees and giving them tasks within their comfortable zone. “You challenge people,” she said. “That’s how they grow and develop. I’m a huge proponent of goal setting.” The goals need to be linked to their firm’s strategy, she added, and individuals and teams should be held accountable for reaching the goals that have been set.
“People say they want accountability, but it’s usually for somebody else,” she pointed out. The results need to be measured, particularly in terms of bringing new business to the firm.
McMasters also emphasized the importance of communication, particularly at large firms with far-flung offices. When Clifton Gunderson was in the process of merging with LarsonAllen, McMasters said she wrote a weekly CEO message to explain the merger to the partners and staff, and she did 10 webcasts and five podcasts, taking questions and ultimately securing the partners’ approval of the deal.
A Time to Be Bold
Nisberg gave a lively speech in which he engaged with audience members, particularly on the question of what is holding many accountants back from charging their clients more for valuable services. “You’ve grown up in a profession where you’ve become the world’s greatest philanthropists,” he said. “I’ve never met a group that gives away more information for free."
[IMGCAP(2)]He encouraged accountants to be honest and tell their clients what they really think and believe to be true, along with the partners in their firms. Nisberg pointed out that many accountants find it difficult to fire a client or a partner who isn’t working out for them, so he led the audience in yelling out, “There’s the door!”
“Now is the time to be bold,” said Nisberg. “Your clients love the fact that you’re afraid of them.”
Nisberg pointed out that many accountants are even afraid to send bills to their clients, for fear of losing them. “You have significant power and influence, and you have to come to grips with that,” he said.
He noted that “accounting has become sexy” for students at colleges and universities. “Young people are starting to dig it again,” he said.
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