Congratulations! Your firm has weathered the opening act of the recession. You're more profitable. You're refocused on business development. You've figured out this "social media thing:" You have a presence on Facebook, Twitter and LinkedIn.

But have you transformed your firm?

You may be doing a different dance, but - if you're like most firms - you're still at the junior prom.

In contrast, a new breed of CPA firm is bootstrapping its way into client boardrooms and wallets. Launched by entrepreneurial Gen Xers, Millennials and young-at-heart Baby Boomers, agile firms are cropping up around the world. They are more nimble, open, innovative, interdisciplinary, and aggressively client-centered than traditional (non-agile) firms. And I predict that will become an increasingly common story in the years to come.

Here's why:

Agile firms are more profitable. Research conducted at MIT showed that agile companies - companies marked by their obsession with the client experience, leadership in innovation, the ability to turn knowledge into value, and consistent, "no surprises" execution - grow revenue 37 percent faster and generate 30 percent higher profits than non-agile firms. Trouble is, most business leaders don't feel they are flexible enough to compete successfully with agile firms. And the bigger your firm is, the harder it will be.

What does it mean to be an agile CPA firm?

Agile firms are nimble. They can adapt quickly to client or market changes. This is, in part, because they have tighter sense-and-respond cycles than non-agile firms. Agile firms regularly round up and discuss the intelligence they're gathering from clients to develop new products or services.

In 2009, an agile firm in Ohio recognized that its manufacturing clients were having a hard time obtaining credit from banks. It found a specialist in alternative lending structures, and introduced him to all of their manufacturing clients. The agile firm quite literally saved many of its clients from going out of business - not by providing tax or audit services, but by noticing a client need and quickly responding.

Agile firms can act nimbly because there's little hierarchy. Any team member can take action to help a client at any time. If you love the service at the Four Seasons, you've experienced the nimble, client-centered approach of an agile business.

Agile firms are lean. They are not bogged down by expensive overhead, burdensome organizational structures, or we've-always-done-it-this-way processes. Agile firms ask questions like: "Why do we need Class A office space downtown when clients prefer that we visit them at their offices, and we can use Skype, GoogleTalk, e-mail and instant messaging to connect our people in real time?"

Agile firms ruthlessly question every expense and would rather "cheap out" on standard industry perks - e.g., golf club memberships for senior partners - so they can focus on the stuff that matters to their clients and employees. Agile firms may not pay the best, but their employees are loyal, because they feel that they have a say in the business. Agile firms aren't encumbered by a partnership structure. They run themselves like a bootstrapping start-up from Day One.

Agile firms are obsessed with improvement and innovation. Agile firms mine the edges of their processes and markets, the place that author Steven Johnson calls "the adjacent possible." For example, agile firms use the lean process to eliminate waste and increase efficiency. Agile firms use other tools like the ROTI scale to gauge the "Return on Time Invested" from meetings, and "sprint" periods of two-to-four weeks to tackle problems or invent new solutions. At the heart of their obsession is the belief that agile firms can always do better.

Agile firms whole-heartedly adopt tools and technology that help them deliver a better client experience or find new markets. Agile firms are already out-hustling you (on LinkedIn) and out-caring you (via Twitter). In addition, agile firms obsessively parse market data to find niches that most firms simply don't pay attention to. For example, agile firms know that second-stage start-ups have created most of the jobs in the U.S. economy in the past five years.

Agile firms are open and transparent with clients and employees. Clients can see the status of their project at any given moment, and receive real-time updates on things that impact their businesses. What's more, agile firms maintain a dashboard of seven-to-12 key metrics that predict future performance and share these numbers with all employees. In agile firms, there is a commitment to the concept that "information should be shared." They trust their employees and clients.

Agile firms don't follow the herd. You won't see them at the standard industry conferences; they go to their clients' conferences instead. They focus their training and education dollars on two things: how to grow their business and how to improve their business. Agile firms are led by entrepreneurs who are positive, curious and relentless about the client experience.

Agile firms ask their clients to pay for value, not time. For example, agile firms may offer a client a flat fee for tax returns in exchange for two meetings each year - one in the fall for tax planning and a second in the spring for business strategy. Agile firms don't see themselves as their clients' trusted accounting partner; they see themselves as a valuable business partner.

Agile firms say "No" to clients that aren't the right fit. Ditto for employees.

Agile firms don't measure themselves by revenue or headcount. They measure their profit. They focus on organic growth and avoid mergers and acquisitions like the plague.


Rebecca Ryan is an author, speaker and entrepreneur whose firm, Next Generation Consulting, helps forward-looking firms figure out the future. Reach her at or (888) 922-9596, ext. 702.

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