Innovation: Key to Growth or Succession
by Terri Eyden on
By Alexandra DeFelice
Entrepreneurs choose to be great. But once they've created a great concept, what happens next?
For a while, these innovators may choose to hire other like-minded, creative individuals or they may choose to hire people who could deliver the concept. However, a delicate balance must form in order for their great idea to thrive and stand out from the competition lurking in the shadows.
Many accounting firm owners started as entrepreneurs, but now they're confronting a new opportunity to reinvent their firms before handing them over to their successors.
This was the message delivered by Gary Boomer during his closing keynote at the Boomer Technology Circle Summit, August 21, 2012, in Kansas City, Missouri.
Boomer outlined some dangers, opportunities, and strengths of today's accounting firms and offered some tips on how to forge forward.
Chief among the dangers: Many firms lack a shared vision among partners. They also lack a succession plan.
In terms of strengths, accountants are the "trusted business advisor" to their clients. As cliché as this may sound, your clients actually are asking you for more advice. They don't want you sitting in the back of the truck filling out their tax returns and conducting compliance work; they want you in the front of the truck driving along with them.
"Be an advocate," Boomer said. "You have the financial insights, and a lot of clients don't have that information."
This doesn't happen automatically; however, effective communication can make it happen. And that means listening to your clients' needs and not just speaking about why your firm has what they need. This is becoming a common theme among respected consultants in the accounting profession.
How much time do you spend talking to your prospects and existing clients about your firm and what you can do for them versus listening to what keeps them up at night? If you do more of the latter, you can determine some additional services you offer that your clients may need, but they don't know you offer. Or, perhaps you currently don't offer those services, but you have the talent pool, so why not?
While we're on the topic of clients, focus on their dangers, opportunities, and strengths instead of your own.
Of course, that requires a change in VISION and strategic planning, which some original owners may prefer to defer to their successors rather than take it on themselves. Boomer acknowledged this, but he emphasized the transition would be smoother if suggested and encouraged by the original owner.
"Next-generation management will value innovation," Boomer said. "How will you live up to that and take advantage of that to increase revenue?"
Many firms' websites are a "disaster," according to Boomer. Most of them look exactly alike and lack focus. Just because your firm has one client in a certain sector doesn't mean you specialize in that sector. A firm's website shouldn't be a billboard for the partners, but should focus on communicating value to potential clients.
Boomer then transitioned into finding the "right" clients for your firm. If you want to provide "value-added" services to your clients, such as budgeting, cash flow analysis, insurance reviews, and pricing studies, are the $200 individual tax return clients the ones you really want to keep?
He acknowledged that many firms still have their existing clients, and walking away from them will be tough. However, he emphasized the concept of "Ten Times" service, which could lead to Ten Times revenue.
Boomer strongly advocated value billing versus hourly billing. While that could be a topic for an entire book, let alone an article, it shouldn't be dismissed. He suggested packaging your services and offering them at a bulk or monthly rate, reiterating the fact that most clients don't care how long it took you to complete a certain task. Also, as automation technology reduces the time to complete certain tasks, firms shouldn't be penalized for accomplishing the same job in less time.
We're at a crossroads in which all levels of staff think differently about these topics.
So what are you doing to innovate?
About the author:
Alexandra DeFelice is senior manager of communication and program development for Moore Stephens North America, and a regional member of Moore Stephens International Limited, a network of more than 360 accounting and consulting firms with nearly 650 offices in almost 100 countries. Alexandra can be reached at firstname.lastname@example.org.