CPA Wealth Provider
By Stuart Kahan
The local diner was extremely bright for six in the morning although quiet. The coffee was rather weak, the muffin kind of tasteless, but the conversation was like a stick of Grade A butter. Gale Crosley consults with CPA firms to help them understand the challenges in growing revenue and to develop certain strategies to achieve aggressive revenue growth objectives. She works with managing partners, partner groups, marketing directors, and general staff on selling, marketing, and product management disciplines. Her focus is on generating optimal revenue from every aspect of the CPA’s practice. She is based in Atlanta.
You are originally from Ohio. What made you head south after college?
I was an auditor at Arthur Andersen in Cleveland. In fact, I was one of the first female professional hires there, but they didn’t want to send me on the out-of-town audits. Unfortunately, the in-town audits were still some 40 to 50 miles from my apartment. In the dead of winter, auditing round the clock, and driving home at midnight in blinding snow, only to get up and drive again in more blinding snow the next morning, did me in. I needed to make a change before putting down roots. So, I packed everything I owned (which basically was a bed) in a U-Haul and headed to Atlanta. I didn’t know anyone there, but in a bizarre twist of fate, I happened to call Price Waterhouse in that city at the exact moment a former college friend was sitting in the HR Director’s office. I’ve been in Atlanta ever since.
When did you start Crosley & Company?
Oh, just at the wrong time, it would appear. Two months after 9/11.
What made you do so?
I was working at a dot com company when the technology bust arrived. I kept up my CPE all those years, even though I was at IBM and other technology companies working in the growth areas: sales, marketing, and product management. My husband used to tease me that if technology ever tanked, I could certainly go back to accounting. Little did I know he was right. After pounding the pavement for a year, trying to re-energize my evaporated career, I had an exploratory lunch with Rick Bennett, co-founding shareholder of Bennett Thrasher CPA firm in Atlanta. Rick, Ken Thrasher, and I had worked together at Price Waterhouse many years before. I offered to consult with them to drive growth, using some of the techniques I’d learned in Corporate America. I used my “early adopter” model, which I teach firms who want to get something off the ground.
From where did you get the original clients?
Actually, from Bennett Thrasher although I continued to use my own methodology to acquire new clients—defining and segmenting the ecosystem, identifying four types of “critters” in it, and executing a research call program. This is the second business I’ve started, and each time I used the same slant. It works for starting any kind of practice.
How do you go about getting more clients today? Is it word-of-mouth, marketing procedures?
Again, I use the same methodology I teach to CPAs. I continue to position, position, position! People know what I stand for. A branding expert interviewed several of my clients in late 2003, and they all said basically the same thing—my approach to help CPAs grow is disciplined, methodical, and process driven. It takes the mystery out of sales, marketing, and product management. In professional services, clients can’t easily experience you before they buy, so you have to give them a glimpse into your brain; in this way, they can conclude whether you might be a fit for them. This is best done through writing and speaking engagements. Also, continuing to stay connected through research calls will insure you’re visible and aware of market needs. In short, it provides the foundation to continue to present new offerings and remain buyer-relevant.
Can you give one or two examples (no names mentioned) of how you helped a client(s) succeed?
The objective is usually to help the client grow more efficiently and effectively. Often the scope is growing the entire firm, but sometimes it’s just one area. For example, we doubled the growth rate in a recent firm by implementing processes, redeploying partners and others to high-growth activities, cutting out the wasted growth initiatives, and training the leaders.
We installed a robust pipeline process and taught partners how to land big fish. We installed segment leaders responsible for the strategic direction and financial health of the firm’s key service lines and industries. We tied each segment’s revenue goal to each leader’s incentive compensation. We trained the segment leaders in the principles of product management—the discipline used to create and drive service lines and industries. Then, we installed a top notch business developer and integrated him effectively into the partner’s activities. The Director of Marketing position evolved into a Director of Practice Growth, who was responsible for not only marketing, but driving sales and product management. The firm ended up with a cohesive growth culture because all the elements tied together.
Sometimes the objective is very specific. For instance, helping a team learn how to land a big fish (large opportunity). I’ll train and coach behind the scenes. The team members will execute tactics, and we’ll reconvene to recalibrate strategy. I’ve helped firms with opportunities from $25,000 up to several million dollars. Once they see the application of large opportunity pursuit techniques, they are well-armed to pursue on their own in the future. These projects have been particularly relevant since SOX created larger opportunities for mid-market firms.
What then are the specific services you render?
Since I spent a third of my non-CPA career in each of the three growth disciplines—sales, marketing, and product management—our services tend to fall into specific categories in these areas:
Firm-wide growth by looking at assessments and designing and implementing growth plans
* Large opportunity management, with individual pursuits, as well as management of the entire inventory of opportunities
* Segment building, by getting niches out of ditches, successfully launching new offerings
* Finding, assessing, and integrating marketing and business development people
How can a CPA firm, or individual, benefit from your services?
Corporate America has the advantage of having VPs of sales, marketing, and product management. In CPA firms, the managing partner and other leaders have to perform these functions. They’ve had zero training, and often no models to observe. I help CPAs perform as individual contributors to their firm’s growth, as well as helping them lead and manage these functions in their firms. In Corporate America, you wouldn’t have a bunch of sales or product management people running around with no leader providing direction, processes, systems, or incentives. When CPA firms install this leadership, everyone is executing a cohesive growth plan, and resources are optimized across the board.
Did you ever wonder why you can observe in a firm that one niche or service line is going gangbusters, and another is dying on the vine? If you use standard methods, you’ll get more consistency in performance. Many of my approaches are based upon my years at IBM. Back then, it was the best company in the world in these disciplines.
But keep in mind that this goes beyond marketing. Many CPAs are confused about marketing’s contribution. Unfortunately, marketing has taken center stage, to the exclusion of sales and product management. So, many firms have what I call a “wobbly stool.” Marketing is only one of the three disciplines necessary for growth. The analogy is walking into a firm that only has a tax practice. What happened to audit and ancillary services? If you don’t even know that product management exists, it would be difficult to work on it. I help firms understand all three disciplines so they can build a solid foundation in all of them.
What are the greatest problems CPAs have today and how can they handle those?
Tactical thinking is our greatest issue. For many, a problem is already upon them before they see it and are able to take action. Often, it’s too late to be competitive. Rather than proactively driving where they need to be, they are forced to react to the most critical problem at hand. To paraphrase Wayne Gretsky, “Skate to where the puck is going, not where it is.”
Take staffing as an example. Watching the market, I told my husband back when SOX was passed that in two to five years you wouldn’t be able to find an auditor. Firms which predicted this immediately embarked on a recruiting and retention initiative. Those that didn’t struggle daily with finding qualified staff. Sarbanes Oxley drove many changes. Those who gazed into the future discovered the 404 opportunity. Others didn’t. Many firms rely on one person—usually the managing partner—to worry about the future. Then the rest of the leadership often present roadblocks as the MP tries to get them moving toward that future. If other partners are tasked with strategy in their area, the firm takes on a strategy-oriented, rather than just a “today’s-problem,” culture.
Why aren’t women (who are growing rapidly in the profession) taking more charge similar to what their sisters are doing in the legal world?
I’m not as familiar with the legal world, but for CPAs, the profession was built when women weren’t in it. And the conditions in many firms haven’t changed enough to be conducive to retaining and developing women rainmakers and leaders. In 1950, there were 750 female CPAs. In 1972, it was about 2,000. Today, there are 108,000 female CPAs. The change has been dramatic and relatively recent. Flex-time and flex-place are still handled as exceptions at many firms. Women have special training needs, due to cultural biases, that haven’t been met. We are just now starting to become aware, as a profession, of some of the impediments, mostly because it makes good business sense not to lose our women when we don’t have enough accountants to go around in the first place.
About 60 percent of all accounting graduates are women, but only about 15 percent of all partners are females. Think of the millions spent in training, development, recruiting—only to have women walk out the door. We can change the tide. The firms who built women’s programs early on—starting with Deloitte in the early 1990s—have seen significant positive changes in retention and leadership statistics.
Incidentally, I should add that we’ve just launched a Women’s Institute to help firms increase their ranks of women leaders and rainmakers. These services include firm-wide assessments and program design, workshops for women CPAs, developing women-as-buyer niches, and an annual conference for women CPAs.
Where do you see the profession going five to 10 years down the road?
Well, speaking of women, they will dominate the profession—not only in the rank and file, but in firm leadership. There will be fewer firms, as consolidation becomes required for many firms which haven’t built adequate leadership into their next generation. This will also force changes in naming conventions. Firms will go from three, five, or more partner names which are difficult to pronounce and don’t roll off the tongue, to single or double short words—Reznick, Friedman, Dixon Hughes, Deloitte, Elliott Davis, Plante & Moran, Larson Allen, Clifton Gunderson. Already most firms are referred to in the market by their first name, or two. Desire for distinctive branding will continue this trend.
Firms will look more corporate-like in structure and governance. They’ll continue to borrow best practices from the corporate world — which is way ahead of accounting in managing for-profit businesses. Part of this will be because there won’t be enough partners to sustain the partner model, as many young people won’t necessarily end up as partners. Also, they’ll continue to see that a pyramid approach makes sense in order to move quickly and stay competitive.
Low-end work will be done by para-professionals and outsourced resources. Outsourcing will be common, because the business case is so compelling. CPAs who are hanging on for dear life to their 1040s and other repetitive work that they’ve done for 30 years will retire. And the work will go to the lowest cost provider of these services. The geographic walls will come crumbling down. CPAs with a special expertise will be hired regardless of where they reside. We’re already seeing this in areas like SAS 70 and industry niches. This will change our profession dramatically, as we’ve been geo-centric from the beginning. Flex time and flex place will be the norm. This will change the model for CPA associations, many of whom originally selected members which were in different geographies. Firm members will be competing more often, and the association model will change. I’m not sure what the replacement model will look like.
Standards overload will continue to prevail. This will drive significant industry specialization. The days of the generalist firm are numbered. The most attractive merger candidates, and the most competitive and profitable firms, will be those with strong talent and specialized client bases. As a result, it would behoove firms to invest in their next generation, as well as become extremely disciplined about their growth strategies.