IMGCAP(1)]One definition of “old” is loss of courage. Everyone is talking about the firm of the future, but many firms are failing to recognize a sense of urgency to make changes in their economic model, service offerings and capabilities. There are several factors than can hold a firm in the past; lack of leadership, current success and lack of future leaders are generally the most talked about reasons. Lack of courage to change is the No. 1 factor.
Most in the accounting profession prefer to talk about capabilities and the fact that they just don’t have the time to change. Isn’t this comparable to the lumberjack who doesn’t have time to sharpen his saw? Transformation into the future requires risk and innovation. It also requires giving something up from the past. That may involve clients who no longer fit your firm’s profile.
The firm of the future will be different from the current firm due to advances in technology and the fact that the world has moved to an abundance, rather than a scarcity, economy. This ultimately causes cash to become less important than time, capability, creativity, credibility, connections and confidence. It also should make firm owners realize that being in charge is more important than being in control.
Control was important in the scarcity economy when the rugged individual could succeed. Success in today’s economy requires a “unique ability team” with a focus on commitment, courage, capability and confidence. Is your firm positioned for future success and relevance? The bad news is that firms must change. The good news is that they get to decide what from the past they will bring into the future (e.g., clients, services and business model).
BREAKING FREE
Change requires courage, commitment and trust. There are no unreasonable goals, just unreasonable time frames. Leadership, thinking, planning and collaboration are required for firms to break out of the gravity of the past. Unfortunately, longer hours and increased capabilities do not ensure continued success and future readiness. In fact, it may be just the opposite in many cases.
There is no question the world is becoming more regulated and complex. Simplification is generally required in order to break through the ceiling of complexity. Simplification has more to do with your thinking than it does the solution. A plan (roadmap), plus people (talent), plus processes is the formula for future success. It is accelerated with vision, leadership and technology. One of the biggest decisions for professionals is the willingness to be led and managed. This requires commitment and courage.
The challenges may look similar but the thinking should be exponential, rather than incremental, in order to define the plan, people and refined processes that leverage technology. A few examples are:
- A remote workforce; work is what you do, not where you go.
- A digital platform; paper is inefficient and restricts the workforce.
- Lean processes; reduce errors (at the lowest level/cost) and cycle times.
- Provide services that clients want, along with those that they need; improve the experience.
- Value is determined by the client, not by the hours required to perform the work.
SEEING BEYOND NOW
Change in a period of prosperity is extremely difficult. Many CPAs are saying, “I only have a few more years; why should I change at this point in my career?” I can provide several reasons, but the most impact comes when it hits their compensation or deferred compensation after retirement. The answer lies in what is best for the firm, not any one individual. Therefore firm governance is extremely important in periods of rapid change.
There certainly are differences of opinion in this area and I believe it’s one of the primary motivations for the large number of mergers in the profession. However, if firms wish to grow, succeed and remain future-ready, they must have:
- Strong leadership.
- A strategic roadmap/plan.
- Access to a talent pool of life-long learners who work as collaborative teams.
- More efficient processes that reduce cycle time and loops in the process.
- A technology platform and ecosystem that meets the needs of the firm and the wants of the clients.
- A business model that focuses on value, cash flow and profitability, not just on chargeable hours.
- Accountability.
Success comes when people are willing to be led and managed. Accountability is empowerment. AT
L. Gary Boomer, CPA.CITP, CGMA, is CEO of Boomer Consulting, in Manhattan, Kan.
