Accounting firms should not be afraid of risk and chaos, said consultant and analyst Allan Koltin during his keynote to open the second day of the 2016 Thomson Reuters Synergy user conference, and, in fact, the high performing firms are embracing both.
The central characteristics of a high-preforming firm, he continued, are:
- They understand spending money to make money
- They have a collaborative partner group with great leadership
- They understand the principles of risk and reward
Often, these successful firms may appear dysfunctional chaotic, he explained, but that’s their “continual commitment to greatness.”
Koltin dived deeper into these aspects of a successful firm, beginning with their willingness to invest, particularly in their technology and people.
“The revelation in the last decade is that it’s all about people,” Koltin said—in recruiting, retaining, and helping employees reach their potential.
“Today, loyalty is a bit out,” he cautioned. “If you can’t help them achieve greatness, someone else might.”
The recruiting process has transformed so much since Koltin’s day, when he accepted an early job offer without asking the salary, to the fall recruiting class of 2017, which, he joked, require that recruiters “go through their agents.”
“It’s getting that bad out there. The white gloves are off and are replaced by boxing gloves. We used to go through the traditional means of finding talent—were reactive. Then [we were] proactive. Now we’re at the third level: absolutely at war.”
Koltin advised everyone to look in the mirror and see themselves as a talent scout—a college football coach visiting the homes of recruits. “Otherwise,” he warned, “you will continue to play defense.”
“The reality of the business is that you need to bring in one [star or high performer] a year to keep it growing and prospering.”
Once firms have these “A” level employees, they must ask themselves: “Do your people know you need them; how valuable they are; do you reinforce that?” Employees at the B level have a few things to work on. But those in the C category are likely the product of bad recruiting and are probably not worth the continued investment.
Technology, of course, remains a very worthy investment both for business growth and retaining the brightest talent. Firms of the future invest in technology to transform from “reporters of the past to predictors and disturbers of the present and future.”
These investments are contingent on great leadership and collaborative partnership, another cornerstone of the high performing firm, according to Koltin. He urged people to identify their leadership blind spots, sharing that one he discovered in an early-career performance review was that he was a bad listener. Naturally, he joked, he didn’t necessarily hear that criticism the first time around.
One unexpected characteristic he has discovered in great leaders is the inability to be wrong. He quoted former GE CEO Jack Welch, who said “the best leaders get it right 60 percent of the time.” The leaders that bat .900 in accuracy? Crippled by their inability to make decisions.
In his talks with veterans of the profession, Koltin found the two major things they would go back and do differently was make tougher decisions quicker and take more business risk.
“Perfection is the death blood of our business,” Koltin declared.
Understanding risk and reward is the third major trait of a high performing firm, according to Koltin. The willingness to take risks is especially crucial for champions in the firm leading new niches.
Branching out to new service areas is a huge area of opportunity for firms, and Koltin repeated one mantra for accountants to keep in mind: “We are in the business of helping clients with financial problems, whatever they may be.”
Koltin challenged attendees to work on their business instead of in their business.
“You only get to play the game of business once… Play it with passion.”
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