Keynote speaker Simon Sinek made a bold statement at the 2019 AICPA ENGAGE conference: "If you don't mind disrupting yourself, you will be fine. Otherwise, someone will do it for you." His message is very telling for the future of our profession. Sinek is pointing out to us that our profession can't thrive under the exponential change we are experiencing without the internal fortitude to alter our business model and revamp our legacy processes and services. Even partners are faced with retooling their skills to remain relevant as leaders and advisers.
We frequently talk about disruption, yet most of us still stop short of significantly changing business models and never actually disrupt ourselves. Why? Is it because we think there's going to be too much pain involved? Or are we telling ourselves we're just too busy and don't have the time to make it happen? Are short-term profits clouding our eyes and clogging our ears?
Embracing the pain of disruption
Firm-led disruption will likely mean a new business model, and that journey is going to require some discomfort and risk-taking. We have all heard the phrase "no pain, no gain." Intellectually, we understand and believe in that concept, but many of us, if we're honest, are happier just making incremental changes. Deep down, we're often hoping we can slide by the disruption and the pain.
Mostly, I hear firm leaders talking about pain generated by outside forces and competition: The pain of decreasing margins due to the escalating cost of talent while fees for traditional services remain stagnant. The pain of lower profitability due to increasing technology and other costs of doing business. The pain of low organic growth when significant percentages of a business consist primarily of traditional compliance services.
Rarely, though, do firm leaders mention the pain of self-disruption. If you believe Simon Sinek, Barry Melancon, Daniel Burrus, Tom Peters, and other thought leaders who share a similar vision, it's time to face that pain, and consider better ways to gauge your progress and assess the disruption that will lead to a brighter future.
Here's an example: Three years ago, I first shared with our firm that we must endure the pain of putting the "old" HORNE out of business and build a "new" HORNE to be successful in the future. We have reduced our reliance on a time-based "chargeable hour" business model with new pricing that provides our clients more certainty in price and scope. We are retooling our skill sets with anticipatory training, collaboration workshops, and a focus on adding more value than compliance services can generate. We committed to flexibility for everyone that is unique to each individual's needs and dreams.
The process has been very painful, as it is hard to change. Unlearning is hard work. We are painfully learning how to be better project managers. What's more, changing while you are successful is extremely painful as you must visit the "why?" over and over.
I do believe this change is paying off. We are more prepared to be relevant in today's market. We have seen our clients express appreciation for the certainty in price and the collaboration on scope. However, we continue to make mistakes and realize there is not a map or game plan to avoid moving forward without the pain of not having all of the answers. Sinek's words remind me of how far we have to go to seize our bright future.
Is your firm willing to disrupt itself?
The process of disruption and innovation your firm faces will be different from ours. I can't speak to every challenge you will face, but I can share some guidelines. Below are questions derived from hard lessons we've learned so far on our journey that can help you determine if you're accepting the necessary pain of disruption. I hope these questions generate collaboration in your firm to assess opportunities to drive change now rather than waiting. The status quo has never been riskier in our business model.
- What is your present action plan to retool partners' and managers' skill sets? Is it optional or required for leaders to grow new skills? Have you identified the skills to be successful in your future view?
- What have you changed in your current business model that provides opportunity for growth not related to or reliant on time? What are you doing presently that, although profitable, is distracting from your future view?
- Have you changed partner compensation and ownership to reflect leaders' progress on retooling, offering better client experiences, developing leaders, and becoming early adopters for new business models? Or are you rewarding clinging to the status quo?
- How are you changing client service to provide for more collaboration, more services, and more of a team approach?
- Who needs to be off the "bus" due to negativity, resistance to change, and clinging to what they have always done?
- Have you intentionally defined how you are distinctive in each service or focus area? Hint: Having "great people," "great culture," and being "trusted" won't make you distinctive. Everyone says this. Being distinctive and knowing how to message it is hard work yet worth it.
- How are you going to elevate your client experience and get away from a client experience that is deadline-driven? Will you allow busy season to distract your best talent from working on new and growing client needs while improving their experience?
- What is your plan to require practicing and role-playing various new skills that improve the ability to offer advisory services through deeper, more meaningful conversations with clients? (Do a few of these for fun, and you will get an idea of how far we have to go in having this skill set as a strength in our leadership teams.)
- What processes that you traditionally billed for by the hour are now automated? How are you capturing that value now?
- How are you improving the pricing skills of your partner group?
- What is your action plan to incorporate training for project management? Have you hired some professionals to lead this critical need in your firm?
- What is your plan to intentionally create a more diverse leadership team with equitable opportunities and an equitable playing field for access?
These dozen questions are just starters to help you identify and assess ways you can disrupt your firm and your present business models. I remain hopeful that if we challenge each other and collaborate together, we will bring about the change we need to thrive as a profession in the future. I believe the bright future that comes from disrupting ourselves is worth the present pain. As my dad always said, "No pain, no gain!"
— Joey Havens, CPA, CGMA, is the executive partner at HORNE LLP, where he leads the 500-employee firm's strategic visioning for culture, growth, and client experience. Learn more at hornellp.com. To comment on this article or to suggest an idea for another article, contact Courtney Vien, a JofA senior editor, at Courtney.Vien@aicpa-cima.com.