How often do you hear the word "innovation" around your firm? Does it sound strange to even mention innovating and accounting in the same breath? If so, you'll want to learn more about Geralyn Hurd.
Geralyn is an innovator's innovator, and her real title is partner and national tax-exempt practice leader at Top 100 Firm Crowe Horwath in Chicago. Under her leadership, the sector has grown at an annual rate of more than 25 percent for the past four years. In 2012, Geralyn was named one of the country's top 25 consultants by Consulting magazine.
COMMITTED TO CHANGE
Geralyn has spent her entire accounting career at national public accounting firms. But she has experienced her greatest satisfaction working in the nonprofit sector with mission-driven professionals who care deeply about their impact on the world. "I made a pact early in my career," she says, "No one would care more about their clients or people. This has been my guiding philosophy." Among the ways she has made good on that commitment is to develop unique solutions to client problems.
The opportunity to do that was one of the things that attracted Geralyn to Crowe, which she joined in 2008. The firm, which was launched in South Bend, Ind., but is now located in 28 offices around the country, had been steadily establishing its own reputation as a house of innovation for a number of years. A forward-thinking managing partner recognized that innovation could offer the firm a competitive foothold. Crowe committed to allocate 1 percent of firm revenue to developing emerging solutions. Especially at the time (the early 2000s), this was cutting edge. It contrasted sharply with the prevailing reactive mentality, which was largely, "Market conditions are great - let's ride them." Crowe's approach was altogether different. It was about innovation as a way to be unique and competitively attractive.
As the economy began to crumble in 2007 and 2008, Crowe did what many firms did. They circled the wagons, focusing on the basics and pulling back somewhat from their deep commitment to innovation. But after a time, it became clear that an innovation strategy was an important driver of firm growth, so firm leaders revved up the innovation engines and Crowe was back.
Around the same time, Geralyn Hurd became interested in a career change. She liked what she saw at Crowe, including the firm's re-energized value-creation process. It featured access to funds, software developers, and other elements required to make new things happen. Geralyn was attracted to the notion that everyone could be an innovator, not just the chosen few.
The firm's focus was supported by a structure that encouraged innovation. A system of innovation ambassadors was created to collect institutional experience and wisdom. And product champions were encouraged to come up with ideas and incubate them in a safe and supportive environment. Innovation was not only appreciated, but was rewarded.
This was just what Geralyn was looking for -- a culture that supported her commitment to creative problem-solving. Again, timing was key. In 2007, the Internal Revenue Service significantly redesigned its Form 990, Return of Organization Exempt from Income Tax.
The practical result was that a relatively simple 12-page form had ballooned into an 80-page behemoth that proved nearly overwhelming for many tax-exempt entities. Many looked to their CPAs for help. The dilemma was that those same tax-exempts were not willing to pay much extra for 990 preparation at a time when the economy was shaky. Many CPAs decided to prepare Form 990s at very low profitability. However, Geralyn had a different plan.
Crowe prepared about 300 Form 990s in 2008 and Geralyn knew the challenge they presented for many organizations. Based on a young developer's suggestion, Geralyn began to play with an idea for a Web-based tool that would elicit answers to various sets of questions, simplifying completion of the form. The idea resulted in the client capturing the basic 990 information that flowed directly to the form for submission to the IRS. This allowed the practitioners to focus on higher-value 990-related consulting services. Geralyn realized the 990 wasn't just a compliance document, but could and would be used as a market-facing document to showcase the entity to attract funding sources, among other things. Working closely with a team that included Web and data experts, Geralyn came up with C-TRAC, an intuitive, scalable tool that the client could use to capture the needed information. A Crowe team reviews the responses and applies knowledge about compensation, reporting and operations.
Geralyn emphasizes that C-TRAC was not an instant success. In fact, it took several iterations to create an exceptional user experience, typical of new offerings. Like its predecessors, today's fifth-generation C-TRAC is the only IRS-approved software developed by tax-exempt specialists. The easy-to-use product supports Forms 990/990T and extensions, conflict-of-interest questionnaires, master compensation schedules, alternative investments, international disclosures and benchmarking analysis.
For Geralyn, the innovation falls neatly in line with her commitment to make a difference for the nonprofit sector. "I am proud that by listening closely to our clients, we've been able to make enhancements to our solutions to increase the value that we bring," she added.
ADD VALUE AND PROTECT PRICING
Geralyn believes that innovation is at the core of differentiation in a mature market, and I couldn't agree more. With more than 700,000 CPAs competing for business and client loyalty, it's a proven way to add value and protect pricing at the higher levels.
When firms innovate, they employ one of my favorite growth strategies - looking at the market from the outside in. It's an approach that leads to client-facing solutions that people want to buy and use.
Geralyn notes that firms that have honed their innovation skills present a triple threat. Triple-threat CPA firms have technical skills, industry experience, and the capacity to apply technology to new products and services.
At Crowe, a world-class example of a triple-threat firm, the hits just keep on coming. Today, the firm is averaging a dozen or more innovations a year. It has designated a chief innovation officer and added innovation as one of five firm-wide goals. Ideas are generated throughout the firm and approved through an innovation task force with representatives from each business unit. It starts with about 80 solid ideas, which are winnowed down over the year.
Innovators at the firm are celebrated and they take ownership for their ideas. In Geralyn's case, she's known around the firm less as a Crowe tax partner and more as the leader of C-TRAC.
YES YOU CAN!
New? Different? First of its kind? Your best chance to make a difference for clients and achieve the growth to which you aspire will increasingly lie in innovation. Today's market complexities are upping the game, and the best firms know it.
Great solutions are out there. Start by developing an innovation-driven culture that encourages everyone at the firm to keep their antennae up for client problems and new ways to solve them. And remember: Always look at the market from the outside in - noticing what they want, not what you think they want!
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