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5 Qualities That Differentiate Your Firm

Oct 11th 2017
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What truly makes your firm unique? Why are you different? What makes you the one-in-a-million that all top college prospects will want to choose?

Hopefully, your firm is one that is actually practicing what you preach! If you are, you’ll know that the following five qualities distinguish your firm from your competition. (I know there are more, but for brevity purposes, I cut the list to five.)

1. A Consistent Tone at the Top

There’s nothing more frustrating to new and rising leaders in your organization than inconsistent messaging and emphasis on what’s important. Old school leaders and managing partners like to focus on what I describe as historical metrics – realization and utilization – and everything revolves around one or both of those metrics.

The problem that has been pointed out countless times in hundreds of CPA firms over the years is that those metrics alone

1.) don’t paint the whole picture and

2.) lead to some negative behavior occurring inside your firm.

Your people are smart. If they hear the message they need to be more chargeable, that’s what you’ll get. And profitability, as measured by realization, will suffer.

If you don’t like realization being low, focus on realization. You’ll discover your jobs appear to take less time, but now billable hours are down.

Why don’t we focus on a more balanced approach that actually promotes the right behavior? The best of the best firms closely monitor, message, and reward new metrics like output/throughput, leverage improvement and growth in new business during busy seasons.

Your firm isn’t unique if it’s the same old tired metrics year after year.

2. Transformation From Compliance to Advisory

You’ve been living in a cave if you haven’t heard the mantra the past few years about the need to evolve from just a compliance-based organization to one that is more consultative and less beholden to compliance revenue. Technology and process optimization are changing the game.

As the compliance work continues to become partially to fully automated, the margins will continue to shrink. It’s a commodity.

Some firms may be able to scale that model and ride that wave to some – probably short-term – profitability. Most will need to differentiate and transform.

One of the key questions I’m getting from partners week in and week out is how do we train and re-train our workforce to be more consultative? The days of just having the vast majority of your professional staff good at tax and audit and a tiny percentage of professionals who can actually advise are over.

If your firm is truly embracing the future and trying to be unique and different you know they’re investing heavily in training new skillsets and toolsets in the consulting arena. And by the way, advisory is not just automating bookkeeping work, it’s anything and everything that isn’t tax, audit and accounting service compliance work.

3. Innovation Process

If your firm is at the forefront of transformation from compliance to consultative work, you’re well aware that you need a model of deployment for new consulting/vertical segments you’re going after. We’re seeing some of the Top 100 firms create the role of a Chief Innovation Officer for help managing this change.

The identification, pursuit, growth and launch of new services should be a well-oiled process that connects marketing, business development and innovation teams inside your organization. Without some organization and planning, you may just be creating small one-off silos that won’t lead to transformation.

4. Not “if” but “When” Regarding Change

Change is a topic near and dear to my heart. My elevator pitch has become very simple over the past two years. When people ask what I do, I tell them “I make your firm comfortable with change.” Sounds simple, right? Hardly, and I have new gray hair to show for it!

A key differentiator in the top firms I go into today is that they have leaders who openly understand and embrace the mindset that change is inevitable, so let’s deal with it and move forward. In many cases, it still takes someone like me to give them the confidence not to slide off the track.

But make no mistake: if leadership isn’t on board with continuous change, your firm is falling fast. The days of a few select partners “silo-ing” their way to retirement is no longer sustainable. The market is too competitive. The rate of change too fast. Leadership in the best firms doesn’t cater to status quo.

5. A Well-rounded and Effective Training Culture

Assuming your firm is on the path to success with those first four differentiators, make sure you don’t send mixed signals to your new hires with an ineffective onboarding and training process. Practice what you preach.

Give them opportunities in a variety of areas. Not all at once, but in a rotational type of format where they can actually digest a little bit of audit for three to four months, a little bit of tax for several months, some advisory work that may include shadowing, etc.

The accountant of tomorrow is going to have to be a great client advisor. Technology will take care of a lot of the compliance.

Your people need to be getting trained to be more consultative and relationship-oriented. That is where the value has been, is and will continue to be.

Are you training toward a new consultative firm?

The original article appeared in the Boomer Bulletin blog.

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By PeterM
Oct 11th 2017 17:15 EDT

Great article! Plan to share this at our next Partner/Manager meeting!

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