I talk with many CPA firm leaders who know the right priorities to focus on, so why is it so difficult to make headway in these areas across the industry?
In my strategic planning engagements, many managing partners have the right words on their vision flip charts, and they genuinely want to create change. But today's needed changes aren't so easy to achieve. They aren't "increase billable hours from 1,000 to 1,100 next year" goals. They require working differently, thinking differently, and reimagining cultures that have long been staples of our industry. Let's take a closer look at a few of today's most meaningful areas to focus on and why firms are struggling with them. Then I'll show why change management is the missing piece to create sustainable gains in these areas.
Growth
We need growth to create opportunities for staff and new owners. Growth replaces lost clients and improves our client mix in higher-profit areas. Growth can fund reinvestment in the firm to help it stay modern and competitive.
The rub: It sounds great, but under the hood there are often unresolved questions and misgivings. Do we have a bench of future partners to lead this work? Do our collective skill sets align with the types of services we want to sell more of? Who is going to drive revenue growth — and how will they be fairly rewarded for their performance?
Advisory
Firms that remain anchored to low-margin compliance work will become increasingly vulnerable. The future belongs to firms that can offer more holistic and defensible advisory relationships.
The rub: When it comes to doing more work outside of compliance, partner anxiety and excuses often build. There is often no clear roadmap for success, and creating new ways of operating can be hard.
Value pricing
The hourly billing model is under increasing pressure from clients and competitors as AI improves efficiency. Firms that don't migrate to value- or outcome-based pricing risk margin erosion.
The rub: In my experience, firms are not usually able to describe why their compliance services create value — it's hard even for noncompliance services. Moving from billing because "it's always been that way" to a more defensible position is necessary to keep profits from collapsing.
So, what's missing?
We have the right focus areas. We set reasonable goals around them. We really want to get there. But the changes can still feel out of reach using traditional methods.
What is change management? It's a structured approach to transitioning individuals, teams and organizations from a current state to a desired future state. It has a clear focus on the human side of change, so that new processes, systems or strategies are successfully adopted. The key is that it makes sure that an important change will stick, not just ricochet off the organizational windshield in six months.
The good news is that there has been quite a bit of research on organizational change, so we don't have to reinvent the wheel. John Kotter of Harvard University is a recognized leader in this area. He has identified
Let's revisit the three important areas and see how these change accelerators below can help:
Growth
Define the big opportunity. Partners often feel stress due to a lack of capacity when they think about growth — or anxiety about a lack of skills. The benefits of growth for the firm and each partner have to be clearly articulated. This growth opportunity also needs to be appealing to next-generation leaders.
Enable action by removing barriers. To take our foot off the brake pedal, we have to address how the firm will build enough capacity to serve new clients (e.g., offshoring, AI automation, ramped-up recruiting, etc.). We also likely need to train and mentor leaders in business development skills. This, coupled with a strong "why," can massively accelerate growth and ensure it continues.
Advisory
Build a guiding coalition. I've seen the move to advisory fail from a lack of true sponsorship. People get busy with their day jobs, and the neglect becomes a death blow to this area. A guiding coalition is a diverse group of leaders who genuinely care and are committed to their initiative — in this case, advisory — being a real thing. Establishing this coalition keeps focus and energy high until the change is instituted as the new norm.
Sustain acceleration. Many firms are already doing at least some advisory work, so significant value can come from accelerating what's already working. This means formalizing new ways of working as an advisor, training people at all levels in those skills, featuring it more prominently in firm marketing, compensating partners based on advisory growth, etc. This shifts advisory work from "I should remember to do more of that" to "This is now the core of how we service and relate to our clients."
Value pricing
Form a strategic vision. Moving from hourly billing to value pricing is more than a change on an invoice. It requires a clear vision of how your firm creates value for clients; how you position that to your clients throughout the prospect, intake and billing phases; and what new roles and responsibilities billers have based on that value orientation. It's a philosophical shift in strategy, rather than an attempt to "not lose" margin on compliance. Taking time to dive deeper into that vision, test it, and clarify how you want it to look at your firm is a starting point for clear action.
Generate short-term wins. CPAs are trained to find what's wrong and fix it. That glass-half-full approach is great for reviewing work papers, but for major change initiatives, we need to put a spotlight on what's going right. Did the client agree to a $2,000 bill based on value, not hours? That's a win. Did we ask a prospect what they value most in their CPA beyond compliance? That's a win. By finding those small moments and then celebrating them across the firm, we reinforce what success looks like, and enthusiasm builds.
The firms that survive and thrive in the next 10 years won't be the ones with a great strategy alone. They will be the ones that are able to institute hard changes. To ensure as many firms get there as possible, we are working with our clients to do both — customize a strategy and vision and dive into the nuts and bolts of a change process to get them there.
What kind of change is your firm struggling with? What would be different if you were on the other side of adopting your vision of success?
