As more and more firms add a chief growth officer to their leadership teams, Sarah Dobek of Inovautus Consulting dives into what they should be doing and how firms can get the most out of them.
Transcription:
Dan Hood (00:03):
Welcome to On the Air with Accounting Today, I'm Dan Hood. We're seeing more and more accounting firms installing chief growth officers, but there's a lot of confusion or confusion, maybe just a lot of different opinions about what exactly a CGO is supposed to do and what skills they're supposed to bring to it here to offer some clarity. On the subject to Sarah Dobek, the president and founder of Inovautus Consulting. They're growth consultants to accountants, works with tons and tons of firms across the country and has done for a long time, so brings a lot of experience. Sarah, thanks for joining us.
Sarah Dobek (00:30):
Thanks so much, Dan. It's good to be back with you.
Dan Hood (00:32):
Yeah, you've been on several times before and always happy to have you as a guest. Happy to have you back in this case. Like I said, this is a big topic. We're hearing a lot of firms installing chief growth officers and often I think with different definitions of what that is. Is there a common definition for chief growth officer that you've seen?
Sarah Dobek (00:51):
No, and I think that's kind of intentional right now. The CGO role in my opinion, is still evolving quite a bit for the accounting profession, especially right now with just the state of all the transformation that's happening in this profession, and I think it's an exciting time to be part of growth in an accounting firm.
Dan Hood (01:14):
Yes, no question. No question. And it does say, I don't think they're having any problems filling these roles, right? This is a good position to have.
Sarah Dobek (01:21):
No, I don't think they're having trouble filling the role, but I do think that there is sometimes a fair amount of confusion. The way that we define the CGO role right now here at Inovautus is really is somebody that's an orchestrator of growth, and what we see is that person is typically responsible for aligning strategy and marketing and business development and client experience, and then a little bit of innovation. When we think about where the profession is today, there's so much transformation happening and the CGO is often at a really intertwined role between all of that in supporting the firm's growth because a lot of this transformation has to do with growth on that side of it. It's a tough role to fill, but it's also a unique role to each firm, if that makes sense. The most successful cgo don't have, I mean, they have some consistencies in the framework of their responsibilities, but it's so much dependent on the size of the firm, the culture of the firm, and quite honestly what that firm needs out of that CGO to be able to drive growth.
Dan Hood (02:34):
Well, let's talk about size there because I think that's something of an issue. When you talk about the role being a sort of coordinating role among all those different functions, that assumes that a firm has a lot of those functions and there are smaller firms they may not have, or at least not a clearly delineated marketing role, business development role, all those different roles may not be clearly separated out among different people. For smaller firms, is there a size of firm or a size that a firm reaches, at which point they should start thinking about a chief growth officer?
Sarah Dobek (03:05):
My answer to this anytime I'm asked about growth in size is the answer is no. What we see is that when a firm sees growth as a strategic imperative, that's the time that we start really looking at taking and defining ownership and responsibility around growth. Now, for every size firm, this can look different. That strategic imperative can say, Hey, we're ready to invest in growth and we are going to put the resources around that to make it happen. And that doesn't just mean filling a marketing coordinator role, but hey, we're invested into bringing in the outside advisory. Oftentimes a smaller firm isn't going to be in a place to hire A CGO. We don't need a full-time strategic resource, but we do need the right counsel and that can come in lots of different forms. We sit in that role a lot in an outsourced position with a lot of firms of all different sizes.
(04:06):
Most would define them in the middle market, but of all different sizes that are looking to invest in growth. And that could be like, Hey, we're going to set our vision and our strategy. This is that important to us, and there's lots of consultants of the profession that do that work, or we're going to bring in the marketing and sales resources that can start to build the infrastructure for growth, not just complete tactics that we're looking to do, but then we look at the larger firms and as they're growing and competing, it looks a lot like putting the people in place and having those full-time resources to be able to respond to that. It's not something that's just a title. It's really a full discipline commitment to what are we doing around growth and how are we continuing to evolve that in our organization?
Dan Hood (04:58):
And if I'm understanding right, it sounds a little bit like you can build your way up to a chief growth officer sort of the same way that this is just a rough approximation sort of the way you can work yourself up to a full-time chief marketing officer. And since you start with maybe a consultant or a freelancer outsourced some services in that area and then you move up made to a part-time person, and then eventually as your growth catches up with that your market, you hire a full-time CMO. Is that a similar kind of thing for a chief growth officer? You can start with a consultant or an outside help and then move your way up to when your growth catches up. You need a full-time person.
Sarah Dobek (05:33):
Yeah, absolutely. And I think a lot of it has to do with the evolution of the firm and making sure that ability to grow means putting the right person in place that cannot just be strategic or not just be tactical. That can be strategic. That's usually a really big leap. And in our opinion, there's a pretty clear definition of the skill sets that are typically needed to move somebody there, but you have to start with some of the core responsibilities in the evolution. And for accounting firms in particular, on a day-to-day basis, one of the things that makes CGO successful and what's needed inside of accounting firms isn't just sitting at a high level looking at strategy for the largest firms in the marketplace. That's a necessary thing. And we have roles that are absolutely defined, but the majority of the profession needs somebody that is very practical, can roll up their sleeves and can get an equal parts execution to an equal parts strategy that's able to drive that and somebody that can really connect dots between things.
(06:37):
This isn't just marketing communications or just sales. The tough part about this role for firms, but also the biggest value is that in order to drive growth in accounting firm, you don't need just sales and marketing. You also need this client experience component, and that's a big driver of revenue, how we interact with our clients, and we've probably heard the term chief revenue officer out there, and that's a big component that's floating around. And so when you start looking at these three pillars, it can get really confusing when we start talking about growth, and usually you see a battle between which one you need first and it's not a battle.
Dan Hood (07:19):
Right. Well, and in some cases there's some overlap between those. You hear people, a business development director and they say a chief revenue officer or chief growth officer, and at some point you just need someone who is thinking about these more broadly, I think, than at a tactical level. The tactical skills are obviously crucial, but it's that added layer of the seed. The thing that sort of elevates or seems to elevate it to a chief growth officer level is that ability to think of it at a higher level.
Sarah Dobek (07:45):
Yeah, I mean it is and it's ability to step back. I mean, for years and years, decades, and as long as marketing and sales have been around, you often see this battle between the head of marketing and the head of sales, whether you call it your BD person and your marketing person, but the reality is both of them have to work together in order to drive growth for the firm. And they are so interconnected in accounting firms that we have to think about that. And a lot of times firms want to lead with one or the other. Well, marketing's not valuable because it's not generating leads. Well, that's not generating leads because it's not closing business. That's not always its responsibility in there, just like there's a role for all of these. And so part of the chief growth officer's role in a lot of these firms and the mindset around that is to bring these elements together and bring the element of revenue generation through client service is probably the better way to define that responsibility.
(08:48):
And somebody that can think about those things, see the big picture and figure out where the firm is at. I don't know, a single accounting firm that we work with that has it all figured out every day there's a different story around where their journey is at. We tackle one thing and we're doing better at that, but there's still something related to growth that we need to address, and it's not about having all of it perfect. It's the CTO's role is to say, in order to get to where we need to go, what do we need to focus on next for some of that? And it could be marketing, it could be sales, it could be conversions on revenue, it could be any number of thing, but somebody has to own the responsibility for driving that inside the organization.
Dan Hood (09:32):
Well, and on a sort of broad level that makes a ton of sense, but what does that look like? Maybe if we drill down on a day-to-day basis, and obviously as you said, sir, this is going to be different from firm to firm. Every firm is facing, they've got some things locked down and some things are other things they need to work deeply on and it'll vary from firm to firm. But on a sort of a day-to-day basis, what does that coordination role look like? For instance, how often does it get hands-on and practical and doing stuff down in the trenches, and how often is it really just a sitting back kind of role and surveying the field?
Sarah Dobek (10:03):
Yeah, I would say that the larger you are, the more likely you're going to stay in that strategic role and you're driving bigger initiatives and there's different things that you might look at as a larger firm, but I would say for the majority of the marketplace, and probably your listeners, we're talking about small firms, mid-size firms, we are not talking about the Uber big firms most of the time that are in there. So on a day-to-day basis, I would say that the practicality of rolling up your sleeves and getting into some of the execution of some of those things is very realistic, right? A common day for somebody on our team might look like reviewing pipeline performance with the partners in BD team. It might be meeting with marketing to review campaign progress or set campaign strategy. Here's where we want to grow, how are we tapping into that? How are we out generating visibility and converting subscribers into leads? How are we coaching individual partners on lead follow up or BD skills development around some of these? How are we tracking our key performance indicators and what is that telling us about where we're at today? And then how are we cross collaborating across the firm? Because growth is not a siloed function. It requires behavior change, it requires coordination with our operations teams. So that's just a common day and tomorrow could look completely differently.
Dan Hood (11:39):
So there is that coordination role, and you had mentioned the need for that ability to jump back and forth between the practical or the tactical and the strategic or the overview. So that's obviously a set of skills that's uncommon. Great when you can find it. Some people are going to be better at one or the other, but you may have to find someone who's a mix. What other skills should you be looking at if you're looking at hiring A CGO? Are there any specific skills you're looking for? I don't imagine there's a CGO degree out there or a credential, but
Sarah Dobek (12:08):
Yeah, so I think definitely there's a lot of facilitation and because of that cross-functional collaboration, the ability to work cross-functionally and understand the needs of the firm and other areas is a really important skillset to being able to, what I call connect the dots between things. A good CGO is going to be able to hear something in one meeting and connect it to something else that the rest of the firm might not be thinking about. That's that strategic element of say, we need to bring these two things together and be able to synthesize that. They're going to have a lot of strong data literacy too. They need to know what to measure and how to act on it and how to help define that for the firm. In a lot of cases, they're going to have some systems thinking involved in it, so being able to build and refine a repeatable growth infrastructure and process.
(13:07):
In order to scale any company, we have to make growth repeatable, and the CGO needs to sit at the center of that. They're going to have a deep understanding of the client life cycle and get into the nitty gritty of understanding that they may not be in all the sales calls and the opportunities, but they've got to be able to take and translate that information between marketing, sales, service, and execution and build. That's what builds the flywheel for the company, and they've got to be a really strong communicator that really can align people around different things and take the time to do it. Again, not often. A strength that we see inside of accounting firms with leadership is strong communication. So this is such an important element to be able to bring that line of sight into it and be able to sell that, and then they're out there building partnerships with people and building trust inside the organization in that culture's way and the unique way of doing things.
Dan Hood (14:10):
Yeah, it's fascinating as you describe all those roles really. I mean, it just reinforces how much of a leadership role this is, it is and why it's in the C-suite. And we've gotten to the point where we have so many chief ex officers, but I think people forget, right? This is a C-suite, these are the leaders of the firm or the company or your organization, and that involves a certain amount of high level leadership that in part because accounting firms are often so small, even the biggest of accounting firms are still pretty small organizations that it tends to be, it's easy to forget the importance of leadership in all that. And I'd like to talk a little bit more about that, about the element of the CTO's role among firm's leadership and with the rest of the leaders of the firm in a second. But we're going to take a quick break before we do.
(14:57):
Alright, and we're back. We're talking with Sarah Dobek of in Inovautus Consulting. We've got a pretty good definition, I think a good working definition of what a chief growth officer is and what they do and how different sizes firms might approach a chief growth officer or their path towards a chief growth officer. But now I want to talk about, let's assume you've got a chief Chief growth officer. You've reached the point where it's time to hire one or not time, you've already hired one. We'll skip the hiring process because messy, and that's a whole other podcast, but let's talk about their interaction with the rest of the C-suite of the firm, of the heads of different service lines, the head of the firm, the chief of the executive committee, whatever the case may be, chief marketing officer probably may have one, a chief human resource officer. How does the CGO interact with the rest of the C-suite?
Sarah Dobek (15:41):
Yeah, so I think a couple of the key roles that we see most common and most important one is the managing partner. They're usually the person has the shared ownership and vision that's in there. Sometimes we have a partner in charge of marketing. Again, that's translating that vision. It depends on the size of firm, the culture, the structure, all the things. The COO or whoever is in an equivalent role of coordinating the resources and an operational alignment. Marketing technically sits in an operational role, but our reporting structure often looks a lot different because of the alignment with the vision and strategy. The firm is so important and how marketing operates is often very different, but the coordination between the execution and building that infrastructure has to align very closely with the operations team and what is happening there. Obviously, if A CGO is actually in place and there is a higher level structure of marketing, they're working with the marketing, the BD team.
(16:42):
So in a larger firm, there's going to be alignment to A CMO or head of sales or some organizations are now putting these CROs in place. So it sort of depends on your structure internally, but they're working with those leaders. You're working very closely with your practice leaders. These are the people that are driving growth around the areas that you're bringing to market and expecting growth around, not necessarily things we're maintaining, although it depends on the significance of that practice area. So you're going to be working very closely with those leaders. And then anybody else in the firm that's really driving growth for the firm, that CGO is really the bridge to ensure that growth isn't isolated and siloed, which is something that we can tend to do really well on the accounting profession in doing that. And so it's really embedded in all of those leadership conversations.
Dan Hood (17:37):
I realize we've been talking a lot about even talking about the C'S responsibility for the growth strategy and for the firm's pursuit of growth, but I don't know if we've talked about their role in setting that strategy. I think we may have touched on it, but maybe we could dive a little bit more deeply into that because I was thinking as you talk to the practice leaders often if they're paying attention, practice leaders can be great resources for figuring out what a growth strategy should look like, which areas, which markets are ripe for service lines, which areas the firm can expand in. There's other people in the firm who have a natural role and say in setting the strategy, the growth strategy, but let's maybe talk about the chief growth officer's role. Obviously on a day-to-day basis, once the strategy is set, they're responsible for it, they're taking accountability, they're making sure it stays on track and is moving in the right direction. But before that, when it's being set, what's a chief growth officer's role there?
Sarah Dobek (18:29):
I think they play a super important role in setting that strategy. One of the things that we see A CGO do is help and take and translate, and I always define it as articulation, the ability to sit in the room and understand where somebody wants to head. Oftentimes, our practice group leaders, especially when they're early in their responsibilities, need to learn how to set a vision and a strategy for what they're doing. And so the CGA plays a really important role and being able to pull that together, whether that's pulling research, looking at strengths inside of the organization, pushing on areas where we think there's the most potential growth backed by all of the market research and competitive analysis and all the other information that typically comes behind setting strategy, but really helping to align the firm and in my mind, help collaborate and driving that process.
(19:22):
It's not that the CGO is only setting the strategy is that they're taking in information, they're working with the leaders to understand where they want to go, even if they don't quite know how to articulate it, they can usually tell you enough to get there. And then being able to sort through that with them, and as a firm gets larger, it's an important responsibility of those practice group leaders in the firm to help set the vision. But usually what we see is the CGO has an equal role at the table in doing that. They are one of the voices around the table at that leadership level helping to do that, but also helping to say, once a firm's defined where they want to go, how do we get there and how do we enable the organization? That's that growth infrastructure piece to be able to align around that strategy. And that's the piece where we start to see that bridge between strategy and actual execution come into play. And it's such a critical element that we can't overlook the importance of that alignment.
Dan Hood (20:20):
Right. There's obviously a huge amount of translation and communication and coordination role for a chief growth officer because they're speaking about, they're speaking, put it this way, they're speaking the language of growth in a way that a lot of other people at the firm may not be, but they're also certainly, right? You talked about they can be doing research, they can be going out there. It's not like they can't bring their own ideas of, Hey, we should be doing this. They could certainly create and innovate on their own as opposed to just being a conduit for other people's strategies or visions.
Sarah Dobek (20:49):
Yeah, absolutely. And in some cases, like a cheerleader for growth. I hate using that term, but it can be really easy to forget how far we've come, and then we're so focused, especially right now with all this transformation. There's so much in front of us and there's so much opportunity and remembering where we've come from and all of that, and then helping again to continue that momentum, that drive around what it is that we're doing, I think is such an important element to being able to build that and having those people at the table.
Dan Hood (21:26):
I want to talk just briefly because started talking about this, there's a lot of things to talk about in this thing. So things pop up and come up above the surface and ooh, I want to talk about that. But then we get into other directions. I want to go back a little bit to talk about as the firm grows, obviously if the chief growth officer's doing their jump firm's growing, that's going to bring changes. The growth strategy of a 20 million firm is going to look different from the growth strategy of a 40 million firm, of a hundred million dollars firm and so on. How does the role change as a firm grows, and how does maybe a better, just a good question is how does the CGO know when their role needs to change?
Sarah Dobek (22:02):
I don't know that there's a big red flag, but what I see between where you're at in your growth journey. So journey is early stage. It's very hands-on execution. We're building a lot of things. We're coaching, we're creating the infrastructure and the foundation for that infrastructure. Once we've kind of gotten past some of those foundational items, and we're kind of mid stage where we're really working on scaling, it's all about leading teams and refining our processes and optimizing performance. This is the stage where we start to see typically we're putting people in place, even if that's one person inside of a firm, and that's where we're starting and we've got somebody that can help with execution and really working on that. When we get more mature, that's when we start to see that strategic expansion and a focus on some of those higher level areas, and again, dictated by the team's growth in some respects and the person being pulled up.
(23:02):
When we get to some of the largest firms in the marketplace, part of the CGO role really evolves into focusing on more around m and a and strategic alignment for partnerships and some of the higher level things. We will typically see those large firms put those people in place and be part of those m and a teams and onboarding and some of those things as well too. So once we've matured, it can really start to evolve depending on the size of the firm again, and where the firm is at and the roles that they currently have in place. We have clients right now that are considered middle market that have a marketing and a client experience person in place, and that strategy looks a little bit different. We have clients that have more traditional just marketing folks in place, and then we have lots of different versions that we know of in the marketplace of what the CGO O'S role is and what their teams and structure look like.
Dan Hood (24:01):
Right. Well, I mean that's one of the exciting things about this role being, I won't say it's new because there have been firms that have had it for a long time, but it's relatively new in IT terms of the number of firms that are picking it up. One of the things that seed about is you can go and watch a bunch of different models of it, different iterations of it to see which ones work best and learn from the failures and successes of others. Hopefully more the successes than the failures. But either way, I do want to, we could talk about this a lot more, and I would like to, but we don't have much time left, so I do want to just take a quick step back. We talked about the road to A CGO and how a firm might go through stages where they start to need to have some of those functions in hand, but maybe before you're ready for A CGO, we can talk about what the thinking is that would lead you down the path of getting to where you can, it's reasonable to have one. What can you do if you're not big enough to hire your own full-time CGO or even get a consultant in? How can you start your firm to be thinking as if they had a CGO in hand?
Sarah Dobek (25:01):
Yeah, first and foremost, assign clear ownership of growth. It's not something that we want to leave by chance, and it's not something we can think about when we're not busy. I don't know a single professional that's not busy.
(25:17):
I also think we have to start tracking our growth. So start by creating a basic pipeline, even if that's in Excel. There's also lots of great free pipeline tools out there in the marketplace today, but consider tracking your growth, right? We cannot drive growth if we don't have a line of sight on it, and that's the first place we start with every firm. Also, define your ideal client. This goes undervalued. An ideal client is not a revenue number for how much they spend with you, and it's not just some subjective attributes like you're willing to pay for our services and they're nice people. Those are great attributes, by the way, but we don't
(25:53):
How they've become a client. So define what that looks like and then start to talk about how we tailor whatever efforts we can give to marketing around some of those things, and then start measuring your outcomes. Don't undervalue the importance of that from an accountability standpoint. The thing that I've said my entire career and that I've drained into people is it's not about the most creative idea, it's about the ability to execute on the idea and do it really well. So pick a handful of things, do it really well, and then layer on something else.
Dan Hood (26:29):
Excellent. Alright. Fantastic advice. And that way, by the time your chief growth officer comes in, they'll be like, there's nothing for me to do. You're all set. And then they sit in their office and play computer games all day. Excellent. Alright. Obviously that's total lie. That's not what they do. Don't anybody take that as a thing for them to do. Go listen to the earlier parts of this podcast to find out what they should be doing. This is awesome, Sarah. Thank you so much for coming on and for I think offering some clarity. Like I said, this is an area where so many firms are trying so many different things that sense some sense of a central role and purpose for this new role is great. Sarah Dobek of Inovautus Consulting — thank you so much.
Sarah Dobek (27:08):
Thank you, Dan.
Dan Hood (27:10):
And thank you all for listening. This episode of On the Air was produced by Accounting Today with audio production by Adan Khan. Rate or review us on your favorite podcast platform and see the rest of our content on accounting today.com. Thanks again to our guest and thank you for listening.