How do you and your firm approach change? Do you readily embrace it, always considering the newest ideas and the opportunities that come with them? Or are you more cautious, not too eager to test the waters until everything has been thoroughly discussed? Or are you somewhere in the middle?
Whatever your answer, those at all levels of CPA firm management need to make sure their workplace is, at the very least, preparing for the future. Especially in 2015, change is a constant — whether it’s via technology or different ways of doing business — that needs to be handled appropriately and swiftly to stay competitive. No matter the size of your firm or its readiness for change, there are essential factors that must be considered in order to make sure your workplace is moving forward into the future.
BUILDING A CULTURE OF CHANGE
In the American Institute of CPAs’ 2014 report, Becoming the Firm of the Future, the organization noted that while “CPA firms have held to one business model for decades, following the same conventions for management decision-making as previous generations never before has it been more important for public accounting firms to have a clear understanding of our own identity — of who we are. A strong sense of what we stand for and what we have to offer can help us maintain and increase our relevance with clients, team members and society. Unfortunately, most firms don’t know who they are, which raises the sense of urgency.”
In terms of change management, it’s critical to look internally and make sure that your firm is like-minded with its clients, the business world at large, and all levels of itself. Not doing so would be a needless form of self-sabotage.
“Firms are trapped by their own success,” says Erik Asgeirsson, CEO of CPA.com, the technology subsidiary of the AICPA. “We all know when companies are faced with going out of business, they change pretty dramatically. But if they’re successful, [it’s] I don’t understand why we need to make investments” in change management.
Rita Keller, president and founder of firm management consultants Keller Advisors LLC, says that in 2015, time is running out to make those savvy investments. “Good intentions, no implementation’ is what I think the [general] feeling is,” said Keller. “Those who are 45 and above are starting to retire. The younger generation gets that we have to embrace change. And the list of things to change is pretty long.”
Keller said that when recently meeting with a group of small CPA firms, not one of them even had a free Twitter account to represent themselves online. “They have to realize how social media and communication is so important,” she urged. “You can’t keep putting it off like the last 20 years, because other firms are going to [pass] you.”
COMMUNICATION WILL SET YOU FREE
Another factor to consider is that a lack of an internal conversation at your firm is just as damaging towards change management as an ill-advised action. When firms don’t choose to communicate through all levels of their own business, it hinders true change and progression.
“You can always trace the problems back to communication,” said Keller. “[Firms] like calm waters, but that’s not how you move into the future. Yes, we’re going to have some disruption, it’s not going to please everybody, but that’s how I introduce [change] to them. It’s for the good of the firm.”
Keller further points out that a lack of communication between different generations — say, Baby Boomers and Millennials — ultimately hurts, as it puts up internal barriers (or “mystery,” as Keller puts it), instead of firm-wide cohesion. “It’s [about] communication and getting feedback on what people feel,” she explained. “Make it clear what people are most uncomfortable about with change. What are your partners complaining about? If everyone’s nodding yes, you’re not making any progress.”
“I recommend firms involve younger people in planning retreats,” she added. “Ask them before you go, What do you think we should talk about?’ Put a question out there. If they don’t, it’s a mystery.”
HOW’S MY DRIVING?
If you believe your firm is on the right path of change, how do you measure if you’re changing enough? Again, it’s from taking note from those around you.
“You can look at benchmark surveys, talking to your peers, the recruitment standpoint — looking at different firms and see how you’re stacking up,” said Asgeirsson. “I also think about bringing talent into a progressive firm;’ supporting Millennials in a better way. It’s less a state of age or size, but a state of mind. How do they view the culture, work/life integration, technology state?”
“[Change] really needs to be documented and laid out to see that there’s a progression,” said Keller. “You have to have an ongoing progress on how you’re doing. Even something like putting up a poster in the lunchroom with a desired goal can work.”
Knowing how your firm fits into the current business environment is key as well, as your firm may feel right within, but not stack up to competition as well as you think.
“We see firms that are going to not be necessarily building a more sophisticated practice, but allowing themselves to fall into the trap of competing against others that are just providing the same base level services or software solutions,” said Asgeirsson. “If you stay the generalist, you’ll compete more and more against software.”
The AICPA Firm of the Future report paints the future thusly: “By 2020, many CPA firms will be composed of 75 percent Millennials — the generation born roughly between 1980 and 2000 — yet firms continue to be managed the way the parents or even grandparents of current partners would have run them. That’s a major disconnect, because the aspirations and expectations of the new generation are drastically different from those of current firm leaders. The rising team member turnover rate in our profession is threatening our ability to provide the services and response that clients demand.”
With this, you must ask yourself — whether you’re directly in charge of change management or not — if your firm is currently making the appropriate preparations for the years to come. This doesn’t come from necessarily following the latest trends or being the most tech-savvy: It comes from a desire to honestly analyze your firm and know what you’re striving toward.
“To drive change successfully inside the firm, it’s very important to be clear on your purpose,” said Asgeirsson. “You drive purpose with what you’re trying to change within the firm. If you get that right,” then the change will start to take care of itself.
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