Change management: 5 pitfalls that prevent change and how to overcome them

August 14, 2024 10:34 AM

You're excited about an idea for your firm: leveraging AI, improving staffing or ramping up a valuable service line. Now comes the hard part: How can you turn your idea into reality?

Change management is the process of guiding firm-level changes from start to end, including planning, implementing and solidifying changes. Here are five pitfalls I see that CPA firms commonly fall into that will cripple any meaningful attempts to bring about change:

1. No sense of urgency

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The pitfall:

Change is hard. Without an urgent problem or a strong desire, there won't be enough energy to sustain the hard work required to make change. If your idea is a "nice to have" but not a "must have," it will likely end up in the dustbin of good ideas.

Lots of CPA firms have told me they want to expand their CAS practice — mainly because they see others doing it. That reason for action has not been strong enough for them to successfully execute on their idea.

The solution:

Get honest about your idea. Is it a "nice-to-have" or a "must-have"? Why?

Ask yourself and your team: If we didn't do anything different (related to your proposed idea), what would be the cost? If the downside (or potential missed upside) isn't large, try moving on to another idea.

This is where storytelling can make a difference. Jumping on the AI bandwagon because you see other firms doing it may not generate a lot of commitment from your partners — but framing it as an absolute requirement to being a viable firm 10 years from now (with the statistics to back it up) may create a strong desire for action in your team.

2. No guiding coalition and buy-in

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The pitfall:

Even when firms know they have an urgent and important issue they need to act on, many leaders fail to garner enough support to bring it past the idea stage.

You don't need unanimous support to make something happen, but you do need a consensus among the key leaders. If you haven't won over enough firm leaders with enough formal or informal influence, your idea will sink.

The solution:

First understand how things get done at your firm. Who needs to give a green light for an initiative to move ahead? Who are the key advocates you need on your side at the partner level and throughout the firm?

Restating your idea over and over, then getting defensive if people don't like it, isn't going to work. Instead, share your idea and then listen for feedback from the key players. You may have to modify your original idea to get enough "votes" for the initiative to become a real thing. While it may feel like a compromise, often other people can make your idea stronger.

3. No compelling vision

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The pitfall:

It's rare for a CPA firm to have a clear and shared vision of their future from the start. A vision can be a galvanizing force that inspires the whole firm to move forward. The lack of a clear vision can result in people moving in competing directions and firm-wide apathy.

Any major change initiative needs a clear definition of success to align and motivate the group.

The solution:

Take the time to clearly define success. Put in deadlines and the metrics of success.

Make sure it is a shared definition of success — not just your own pet project (remember the part about getting buy-in upfront). When a representative group of people helps shape the vision, it will feel inspiring throughout the firm.

4. Focusing only on what’s wrong

The pitfall:

We are trained to find mistakes and fix what's wrong. While that's great for keeping your tax returns out of IRS audits, it's not a great strategy for creating long-term change in an organization. Human psychology is such that if we continually focus only on our faults and what's not working, people soon become discouraged and disengaged.

The solution:

While it's not wrong to identify the gaps between where you are now and where you want to be, balance it out with a focus on the positives. Talk about the small and big wins with your team. Praise people for good effort — even if they failed to produce the result you hoped for. Showing how much progress you've made towards achieving the vision builds momentum and a feeling that "this is really possible." Don't shy away from the problems, but keep a balanced perspective by pointing out enough positives to keep people engaged.

5. Staying down after you fall off the wagon

The pitfall:

Even the best-laid plans can go off track at some point. Internal things like losing your tax manager or back-to-back retirements can happen, and external things like the COVID-19 pandemic and a barrage of accounting standard changes can happen too. If you hit a bump in the road, don't just stop. If you wait for a long stretch of sunny days before you execute, you may be waiting for a long time; rainy days are inevitable.

The solution:

When things get hard, it's OK to slow down. It's OK to stop for a bit — but then keep going. The best change management processes include regular team meetings to track progress, identify obstacles and adjust plans based on current realities. When it gets hard, you may need to stay the course on your change plan and de-prioritize other work. Or you may want to modify your original goal to push it out in time or dilute the significance of the result. As a last resort, if things change in a way where it no longer makes sense, you may need to kill the project altogether. Whatever the ultimate call, make sure it happens after an intentional discussion and analysis, instead of because "life happened" and the initiative became an afterthought.

Change is possible. That's good news because CPA firms need to change more and faster than ever. With the right approach, you can guide your change process effectively and confidently.