Thirty years ago, Krista McMasters applied for a job at Clifton Gunderson’s office in Danville, Ill. She was fresh out of the University of Illinois undergraduate accounting program. Despite good grades, she heard nothing back. McMasters had job offers from other firms, but she persisted with Clifton Gunderson until a partner named Carl George hired her.
George supervised McMasters’ first audit and handled her first job review. Before long, George was promoted to a firmwide position in another office and, ultimately, became CEO of Clifton Gunderson. McMasters likewise rose through the ranks. She was named director of assurance services in 1989 and, in 2005, chief practice officer.
Soon the protégé will become the successor. George will step down in June 2009 after 16 years as CEO of Clifton Gunderson to prepare for his 2012 retirement. McMasters will become the first woman to serve as CEO of one of the country’s 25 largest CPA firms.
McMasters spoke recently with the JofA about her career path and challenges facing her firm and the profession. What follow are excerpts from that conversation.
“Corner Office Conversations” is an occasional series of personal talks with high-level leaders in accounting and finance.
JofA: What are your priorities for this time leading up to becoming CEO? How are you preparing for the new role?
McMasters: Right now my immediate priority—I’m getting out to the offices and talking about the transition period and making employees comfortable with the change that’s going on in the firm, talking a little bit about where we are at in our strategic plan and what we’re going to do with our next strategic plan. So I’m doing as much as I can to be on the ground floor and really start communicating.
Also, I have to transition my role to others in the firm, so we’re approaching that with a clean sheet of paper and doing some research on what other firms are doing from a firmwide structure standpoint so that we can make some decisions on how we’re going to restructure the position once I take over as CEO.
But my most important responsibility in the months ahead is to start and lead the next strategic planning process for the firm for the five-year period that ends in 2014.
JofA: How will your tenure differ from that of your predecessor, Carl George?
McMasters: Our vision is going to stay the same. Our mission is “Growth of our People and Growth of our Clients. All else follows.” That mission stays the same. I’m going to build on that mission as it relates, especially, to our people initiative because our people issues are not going to go away. It’s going to be even harder to make decisions and make sure you have the right people in the right roles. So that’s going to be a high priority. We’re going to further enhance our people initiatives in our next strategic plan—no question about it.
I also think a challenge for us that’s going to be a challenge from a strategic standpoint is just succession in general. We’re no different than any public accounting firm at our level or any level. We’re all going through succession issues. A lot of people in leadership positions at Clifton Gunderson are aging, and we need to make sure that we have the right people in place and make sure our leadership programs are strong. That’s going to be a high priority under my watch.
JofA: You have said that it wasn’t a silver bullet, rather it was 50 different things that made the Priority One human resources plan you developed effective in cutting the firm’s turnover rate from 30% to 15%. Talk about the top two or three components that made the biggest difference.
McMasters: I can break it down by area. We started, for example, in the recruiting area. We redesigned all of our hiring functions. We gave people training on what it really meant to hire the right people. We put in something that we call SMART objectives where we defined our positions a lot better. Prior to that we had informal job descriptions, and we actually refined those job descriptions and made sure that, when we were interviewing, we were really getting at people’s strengths to match their strengths with the requirements of the position, as defined in the SMART objectives.
In the retention area, it was our mentor program—what we call our career adviser program—and really putting accountability behind that program, making sure that we were matching people in the right service area together and that everybody was engaged in the program and making a commitment to it.
Those are probably some of the most important initiatives in the recruiting and retention areas. The other thing I would say is we have something that I think is really important called Project Life. Project Life is about helping our employees not only with their career but helping them maximize their life. That might be flexible work arrangements or other development opportunities that help develop them professionally and personally. It’s customized to their individual needs.
JofA: When you are considering new hires, what makes a candidate stand out?
McMasters: Passion. It doesn’t matter so much what they’ve been involved in, but that they’ve been really involved in it and active and they’re passionate about it. They really like working with people. They’re able to communicate, even at their level, at their stage in their career.
JofA: What was your worst professional misstep, and what did you learn from it? How did you rebound from it?
McMasters: A lot of the missteps I’ve had with individual situations within my career I would attribute to not listening to the degree that I needed to listen, to not gathering enough information to make a decision and really listening to input before a decision was made.
I’ve never had any difficulties making decisions. I’ve learned that you need to gather information to make sure that you understand everybody’s needs and then make the decision.
JofA: What are the goals of the women’s initiative Clifton Gunderson recently launched?
McMasters: We made a decision that we were going to launch a formal women’s initiative and make it comprehensive. The overall goal of the initiative is to get more women at leadership positions in our firm. That’s really what the program is all about. We held our first steering committee meeting. We’ve got representatives from all over the firm, both men and women, to help us design specifically all the different initiatives that we need to do to make sure that we reach that goal— to get more women in leadership positions at Clifton Gunderson.
The first goal is we’re going to conduct a comprehensive survey. We don’t want to start launching a lot of initiatives that are not really going to help us reach our goal. So we’re going to do a very comprehensive survey and prioritize what we hear from that survey. Then we’re going to pilot the program in a few offices and really get women engaged and build a firmwide program based on what we learn.
But the first step is this survey and also a business case communication initiative to get everybody engaged in this—women and men. Anything we ultimately do will benefit both genders.
JofA: How has being a woman affected your career path?
McMasters: I have to tell you I think it’s been neutral in terms of my career. I never thought of myself, even from the beginning, as any different than any of my male peers who I started out with. I was fortunate to represent our firm on some national committees and had a lot of experiences that contributed to my development that put me in this position to be qualified to accept these responsibilities.
JofA: Professionwide, why aren’t women reaching positions of this level more?
McMasters: I think that the biggest barrier has been flexibility, and it’s been difficult for firms until the last five to 10 years to realize that they had to provide more flexible work arrangements for females in order to get them to advance in leadership roles in their firms.
And the business case for those arrangements is there and is even stronger today. Clifton Gunderson is hiring about 54% females today. So we have to find a way to make sure that we’re flexible and we don’t look at it like it’s a barrier that a woman’s career is on hold during a period of time. Their career needs to advance at the same rate, even if they need to work on a part-time arrangement for a period of years. I think firms are opening up to that initiative a lot more today than they were 30 years ago.
JofA: Setting aside people issues, what other big challenges are firms—specifically firms in your competitive group—facing?
McMasters: One of the biggest issues is regulatory change and international convergence. Clifton Gunderson wants to be ahead of the game. We want to be a leader consulting with our clients and helping them through all of the changes. It’s going to be a major strategic initiative to strengthen our international capabilities in general but also to really be a leader in the convergence to IFRS.
We work primarily with privately held companies. There’s no question there are a lot of advantages with IFRS from a consistency standpoint across the world. It’s just a challenge to get people to see the advantage right now.
GAAP is a very rules-based accounting system that answers a lot of questions for people. When you go to something like IFRS, it’s much more judgment-based. There’ll be less guidance, potentially, out there. People are going to have to make more decisions on their own.
Professional activities: Member of FASAC and the AICPA Governing Council
Education: Bachelor’s of science in accounting, University of Illinois
Hobbies: Fitness; flying with her husband, pilot Rob McMasters; reading; and movies
Favorite book: No Ordinary Time: Franklin and Eleanor Roosevelt: The Home Front in World War II , by Doris Kearns Goodwin
Favorite director: Cameron Crowe
Online-Only Interview Questions
JofA: Talk about the firm’s involvement in peer review.
McMasters: Peer review is really important to our firm. We are the peer reviewers of several of our peer firms. We do it because we believe, first of all, it’s the responsibility of the profession. People need to be engaged in peer review if we’re really going to have the robust peer review program.
We also feel it’s an advantage for our partners and senior managers to get to go into other firms, take a look at what they’re doing and potentially bring best practices back to our firm. It also helps them keep up to speed on technical developments that are going on throughout the profession. It really lets us take a look at how other firms are actively implementing new standards. It’s a tremendous opportunity on a lot of different fronts, so we really encourage people to participate. And, actually, we don’t have any problem getting people to participate. It’s a culture of our firm.
JofA: What advice or guidance would you give young women on being successful in the business world?
McMasters: I think you have to have a passion for whatever it is that you want to do. Attach yourself to mentors that can help you identify your strengths so that you can really play on those strengths.
No matter what you do, I think that you have to really believe in it and engage in it and bask in it and be willing to commit to your own self-development and lifelong learning. So you have to make sure that you really enjoy it more than anything else.
JofA: Who had the biggest influence on you growing up?
McMasters: Probably my parents in general, but certainly from a female perspective, my mother. I was surrounded by a lot of very independent females—my mother, my grandparents. Both my grandmothers worked. Actually, they were both bookkeepers. And I think my mom raised us all to be very independent thinkers, to really do the best job you can do at anything that you try. No matter what it was—how little or how big it was.
JofA: How do you cope with stress?
McMasters: The way that I relieve stress is I’m really into exercise and I’m very health conscious. So I exercise every morning and stay committed to it. If I didn’t do that I think I would have definitely increased my stress levels. So it’s a really important part of my life.
I run. I’m into cardio. I do a lot of weight training. I have a mini gym in my house. I’m one of those very early risers—I get up at 4:15—and I also watch movies, so it’s a way for me to catch up on all my movie-watching and also television shows. I’m not home a lot at night. I don’t have an opportunity to catch up on all that stuff at night so I do it in the morning while I’m working out.
JofA: You’ve said that you realized early on that joining Clifton Gunderson was the right choice for your career. What got you engaged in those early days?
McMasters: I felt like I’ve known from the beginning that this was the career for me. The profession was different 30 years ago. You led assignments right from the beginning. So the firm got me engaged in some great client activities in the first few weeks that I started. And I enjoyed it. I expanded on it.
I’m someone who questions the way that we’re doing things, and Clifton Gunderson is a firm that really wants people to invest in the firm that way. They are willing to listen. I believe we’re like that today. If somebody is passionate about something and wants to help provide solutions to benefit the firm, then we say, “Help us design a solution. Write a strategic plan.” So there are a lot of different things I did along the way that I think led to where I am today.