Practice Profile: The Siegfried Group is in a league of its own
The Siegfried Group has redefined the role of an accounting firm so aggressively, they are no longer seen by many as a traditional CPA firm. The firm has the growth, revenue and geographic reach to stand alongside other large national and regional firms, but founder and CEO Robert Siegfried used a different model to build his firm.
The Siegfried Group predominantly provides talent delivery and leadership advisory services to Fortune 1000 companies across the country. The talent delivery component is especially radical, in that Siegfried hires professionals to work on large-scale projects for Fortune 1000 companies, but only those projects that are internally led by the client companies themselves. For example, Siegfried helped DuPont spin out a large part of their company on a project that helped define Siegfried’s business.
Founded in 1988, Siegfried was still operating as a more traditional CPA firm when they got a call from DuPont in 1995 requesting a presumably typical assignment. Siegfried went in “to scope the project out for our team, and see how much of my partner time would be needed,” he recalled. “[DuPont’s] head of corporate planning said, ‘Rob, I’m not sure you’re following. By the time I explain what you need to run this complex project, it needs to be over. In other words, I need to run the project so we can get it done faster, better, cheaper, easier, simpler.’”
Siegfried was taken aback, but then, “it struck me … I provide accounting, they provide leadership. My people loved it,” he shared. “They were working for a neat project, a neat company, a neat person, and taking it really seriously.”
Specifically, the Siegfried team was preparing the carved-out financials to be audited by DuPont’s CPA firm, PwC. The work struck a chord in Siegfried’s entrepreneurial heart, hitting a sweet spot of his business motivators — to do work that was both “irresistibly compelling and seriously relevant.”
Thus, the accounting resources service business was born within Siegfried, with the firm then seeking out similar projects. “In the accounting resource space, we won’t take [the work] on if they don’t run it themselves. Not your typical accountant would do this. It’s all about courage. About one in five accountants like this type of work. It redefined this practice.”
CPA LIFE IS A HIGHWAY
In the process of recruiting the 20 percent who are drawn to this type of work, Siegfried identified a unique group of professionals that found satisfaction in short-term, project-driven work. Turnover is consequently higher, with professionals typically staying about four years, but the job appeals to the kind of in-demand professional who might be turned off by traditional, larger firm work, according to Siegfried. Currently, the firm can provide dozens of these professionals, from their resource team of more than 500, for larger projects.
The firm usually hires people that have at least three years of experience and are often at least four years out of school with experience in the Big Four (Siegfried estimates that about 60 to 75 percent of their resources are Big Four alumni).
“They don’t hate auditing but they ‘don’t want to make it my life,’” Siegfried shared. “The turnover rate [in the Big Four] is pretty substantial, but contrary to what they want to believe, not only the best people stay.”
Siegfried, quick to speak in metaphors and philosophical musings, likens the choices of today’s younger professionals to those on a highway: “The Big Four is the left-hand lane — it’s fast and a little out of control, not always well-managed, the hours are crazy, and exciting things are advancing quickly. The only [other] choice is the right-hand lane, which is slow, and clogged up with tractor trailers. These are your choices. If you go to a Big Four firm, a CPA firm, and if you’re not thinking of leaving in the first few years, you’re an aberration. I don’t know what other profession is like that.”
Siegfried said that his firm provides an alternative: “We have so many people come to us, because we offer something to accelerate their career and life. Siegfried [is like a] hovercraft, we have like-minded people who have ambition, courage and political skills, and we’re looking for other people like that.”
ONE ON ONE
The firm is also seeking people to join its leadership advisory group, a role they usually transition into after working in the resource group. Those interested in moving from technical to softer skills are nominated or self-nominate to apply for the firm's four-month Director Explorer Program. After graduating from the program, participants become associate directors, and join a team that will soon have about 50 people.
The firm’s leadership advisory services are a passion of Siegfried’s, who touts his — and in turn, his staff’s — ability to advise financial executives in a very personal way. It was also an impetus for him to leave Arthur Young after seven years and start his own firm.
“I had a growing desire to be an in-charge entrepreneur and to help people … to help all stakeholders, clients and employees self-actualize and be emotionally gratified. When I left Arthur Young [one of my former colleagues] said, ‘Those are lofty goals for a CPA firm.’ I said, ‘Maybe, but it’s what gets me out of bed in the morning — more than doing audits or tax returns.’ It’s what I was driven by from the beginning. We help people transform themselves into better leaders, to exponentially improve their lives.”
The model for this advisory work is “one relationship at a time,” according to Siegfried, though they also conduct leadership presentations. Siegfried, and his other leadership advisors, will approach clients in a one-on-one setting. The services are not for everyone, he acknowledges, with most financial leaders either not interested or unwilling to change. For what Siegfried estimates are the two-thirds of executives that are intrigued, “The mindset is to make the commitment, have the courage to do it. I will specifically ask you questions, to get to the ‘what’ and ‘why,’ once someone is really clear how and why they want to do it.”
The resulting consultations are tailored to the client. “It can start with you and me having a meeting over a glass of wine,” Siegfried explained. “We talk about some questions, great values and habits. How many times will we meet? It’s like when you’re dating someone. You don’t know if it’s going to work. In an effective leadership advisory conversation with someone, it’s helping them get really clear on what it is they want to do.”
Siegfried draws on “everything I learned in my first 10 years. Just because I don’t control a $15 billion company, doesn’t mean I don’t have the same issues. Just like me, they are scared, lost, confused. It’s very personal.”
He is also not afraid to confront these leaders with the reality that if “the fish stinks, it’s from the head.”
“If there’s a problem with the firm, don’t look too far, you’re the head. If the fish stinks, you stink, and [you need to] figure it out.”
Siegfried assists by implementing a “rhythmic process” intended to get in touch with the leader’s character, keeping in mind what he deems the “devastating statistic” that 96 percent of all entrepreneurial firms fail in the first 10 years.
For these more entrepreneurial firms, especially, Siegfried provides proactive financial advisory services. Instead of purely looking back on audit results months after year-end, the firm meets with clients every quarter to provide forecasts, and chart out profits and cash flow plans, and “figure out why they are off track.” Siegfried credits his economics degree, earned when he planned to be an economics professor, with inspiring this prospective method of accounting.
Overall, 80 percent of Siegfried’s revenue is derived from Fortune 500 companies, a clientele that grew the firm nationally beyond its Wilmington, Del., headquarters to 17 other offices in 16 total states. The firm also specializes in pre-IPO companies going through change.
The Siegfried Group has an advisory board and 10 senior executives that share in the bottom line, but CEO Siegfried retains a controlling interest, which he said gives him a “huge advantage, to think more boldly and effectively.” The company had $135 million in revenue in 2016 and is on track for $175 million this year, Siegfried reports. Still, the firm’s unique structure defies easy categorization.
According to Siegfried, industry bench markers and publications (including Accounting Today) say, “‘You’re not doing audits under your own name,’” to which he responds, “Yes, by choice. There were some years we were probably doing more than most — we were providing hundreds of senior [professionals] directly to Big Four firms to assist with the audits. We just decided to not only do audits and reviews under our own name. The work wasn’t as interesting. We’d rather be an advocate for the client with our leadership advisory and talent delivery services. Therefore, we’re not a CPA firm. I didn’t win that conversation with some members in the CPA world.”
But Siegfried is willing to have, and continue, many others.
“Competitors say Siegfried is all smoke and mirrors; no steak, just sizzle,” he said. “Leadership advisory, [talent delivery and] financial advisory is a lot of steak. But because it’s different, they didn’t want to hear about it.”
AT A GLANCE
Firm: The Siegfried Group
Headquarters: Wilmington, Del.
Founder & CEO: Robert Siegfried
No. of senior executives/staff: 10/600-plus
Year founded: 1988
Services: IPO readiness; mergers & acquisitions; divestitures & carve-outs; revenue recognition & lease prep; process re-engineering; systems implementations; restructuring; SEC and other regulatory reporting; accounting policy & technical research; accounting operations; period-end close; consolidations; financial restatements; external audit preparation; financial planning & analysis; budgeting & forecasting; Sarbanes-Oxley; internal audit
Industry specialties: Fortune 1000 and pre-IPO companies