Reprinted with permission from International Accounting Bulletin
Part one of this article focused on strategic growth as a critical imperative for accounting firms around the world. I noted the profession’s historic hesitation to jump on the growth bandwagon and the impact of that decision.
The article also noted factors that are changing the profession. In part two I detail those factors and the need to address them in order to achieve sophisticated, lasting growth.
Our world is changing
I liken the shift in the global accounting landscape during the last few years to the dramatic sandstorms I observed while visiting Dubai. Strong, gusty winds stir up the desert sand, making it basically impossible to see. After the storm passes the result is a radically altered topography. Our markets have gone through a similar permanent shift in the landscape over the last few years.
During the global recession many accounting firms echoed a similar refrain: “This is no time to grow! We’re barely hanging on as it is.” Firms became singularly focused on battening down the hatches and cutting expenses. They are now left questioning how to grow in a significantly more complex environment – complex due to convergence of multiple market dynamics.
Globalization is perhaps the number one element of change. Clients the world over are leading accountants to the global marketplace and we need to be prepared to deliver what they require.
A 2012 white paper by the Association of Chartered Certified Accountants (ACCA) identified the drivers of change shaping the profession over the next decade. Globalization was high on the list. In order to survive, and certainly to grow, even mid-market firms must seek a place at the international table alongside our clients.
The aging of firm leaders is another critical factor. It’s estimated that thousands of public accountants will retire within the next decade. Most concerning is that the exiting generation has not taught the next generation essential lessons in how to grow a firm.
Another driver of change is the increase in regulations and standards, especially in light of recent financial scandals and the banking collapse. Hyper-regulation is a trend the world over.
As new standards or regulations emerge, accountants certainly must provide clients with awareness and oversight on compliance issues. But most firms remain focused on the impact of regulatory change on the delivery of their service, to the exclusion of using these changes to drive new service innovation.
To counter this, audit and tax leaders must perceive their role as not only ensuring the quality of service delivery, but also influencing the strategic direction and profitable growth of their services.
Specialization and Competition
Growth-minded firms recognize that the days of hanging out a shingle and waiting for business—any business—to walk in the door are over. Successful firms specialize, proactively identifying gaps in services then filling them with innovative, market-leading offerings.
This is especially important in a mature industry such as ours, characterized by fierce competition and an abundance of practitioners – more than 700,000 CPAs, and even more Chartered Accountants worldwide. This excess drives commoditization of services and pricing. Specialization is one of the best antidotes.
Communication is another powerful change agent. Many firms are embracing social media to create communities of interest and share thought leadership. Social media enables globalized specialization because it gives a firm the power to attract a highly focused worldwide community of buyers.
But cutting edge firms are taking the next step, with social media becoming the centerpiece of their web presence. Traditional sites use text and photos to laud a firm’s attributes, which is of little interest to most buyers who seek answers to their problems.
Top firms are delivering sites that integrate Twitter, LinkedIn, Facebook and other social media channels as the very foundation of website design. Firms that fail to see this are destined to limit social media to a bolt-on to a traditional chest-thumping discussion about the firm. Again, buyers don’t care about eye-glazing website text which looks like every other firm’s.
‘Step forward into growth’
Growth is an increasingly sophisticated game. Firms that wish to compete must increase their knowledge and understanding of the forces acting on them and on the marketplace.
Abraham Maslow, the psychologist behind the theory known as Maslow’s Hierarchy of Needs observed, “You will either step forward into growth or you will step back into safety.”
Rally your team around the goal of sustainable, strategic growth and turn your intentions into a winning game plan. Start with a brainstorming session. Post key words on a flipchart – globalization, succession, regulation, specialization, competition and communication. Ask the group to envision the hypothetical implications of these on the growth of the firm.
It’s more than an interesting exercise. It’s an opportunity to strategize and identify the best approaches to positively impact your future growth.