|In order for change to happen, people and organizations must adopt new behaviors. Most in the accounting profession admit that change is necessary, but honesty about the situation doesn't make change easy or fast. The gravity of the past is generally more compelling and less risky to many than the potential reward of the future. With this said, internal and external forces are driving change at an increasing pace.|
Lack of understanding of change management is
one of the most significant dangers that firms identify in strategic planning
sessions (along with growth and succession). Change management is a skill, and
those in our industry know they need it; nevertheless, few firms offer or seek
out related training. How can firms better manage change?
Before we answer that, let's explore some
prevalent myths associated with change that hold firms back and make change
management more difficult than it needs to be:
- Education is the key.
- Incremental is better than exponential
- Don't move too quickly.
- I'm not part of that change.
Though widespread, these assumptions don't have
to be and should not be the norm. Let's examine the myths before considering
some guidance and tools that can make the process less stressful and more
People don't change with education alone, and
education takes time. While the mind is both emotional and rational, the
emotional side typically dominates when it comes to change. Education is
usually good, but it can be time-consuming and expensive without significant
results. Leadership, communication and coaching provide a greater array of
positive results. Providing a compelling vision and pathways to achievement is
People become tired and stressed if change takes
too long. Short-term pain is generally better than long-term suffering. The
industry has witnessed a significant push toward paperless and document
management initiatives over the past 15 years, and this offers a good example.
Firms that have done it are reaping the rewards, while those that haven't are
still holding meetings and arguing about procedures. Your firm is better off to
"Just Do It" - like the Nike commercials suggest.
DON'T MOVE TOO QUICKLY
This is often associated with incremental
change. Sometimes incremental change is appropriate, but in today's
environment, exponential change is occurring in technology (moving from
client-server applications to cloud computing systems), succession (Baby
Boomers retiring faster than new people entering the profession) and the
economic model (hours x dollars no longer represents value in a results-based
I'M NOT A PART OF THE CHANGE
Improved technology typically benefits those
lowest on the organization chart first, while those making decisions are often
least impacted. However, they must not allow their skills to become obsolete,
or put themselves outside of processes and workflow, or they become candidates
for early retirement and buyout. Employability for a lifetime is different from
employment for a lifetime.
Change can be positive or negative. The best way
to predict short-term results is to look at initiatives the firm is currently
executing. If your firm is ignoring changes in technology, succession, the
market and regulation, chances are high that in one year it will be worse off
than today. On the other hand, if its focus is on the "big rocks" and
making progress, the situation should improve.
Now to answer the question, "How can firms
better manage change?" It takes multiple skills and a team approach to
succeed. The following are required:
- A shared vision and plan.
- Leadership and management.
- Discipline and commitment.
- Coaching and accountability.
- Reality and communications.
These may seem reasonable and within reach of
most firms, yet execution is the most significant challenge. The process is
more like managing a simultaneous, three-act play than working from a
sequential checklist. It requires planning, people and processes, with
technology as the accelerator.
SHARED VISION AND A PLAN
Most firms have a vision of some sort; in fact,
some have as many visions as partners (this is a big risk to a firm's long-term
viability). The challenge is to develop and communicate a single vision that is
shared and supported by the firm's values.
Your firm's plan should be formally documented
and no longer than one page, because it's impossible to effectively communicate
or accomplish more objectives than can fit on a single page. The plan should
contain strategic objectives, measurements of success, initiatives for each
strategic objective, due dates and assignments.
Once the firm's strategic plan is approved, each
partner and manager should develop a personal 90-day game plan that supports
the firm's strategic plan. After a successful year at the partner and manager
levels, individual 90-day game plans should be required for everyone in the
firm. Discipline and right behavior must start at the top, and permit no
"sacred cows." If anyone, including a partner, refuses to
participate, that person should be required to get off the bus.
LEADERSHIP AND MANAGEMENT
Leadership is absolutely necessary to ensure
commitment. High-level, significant changes require significant involvement from
leadership. Changes associated with efficiency and effectiveness can be
implemented by management, but the process takes less time with involvement
from leadership. Change is much easier in firms with great leadership and
management. In fact, difficult and impossible change in other firms may be
routine in firms with great leadership and management. Remember that management
must have authority as well as responsibility.
DISCIPLINE AND COMMITMENT
Behavioral changes require discipline. This is
true for people as well as organizations. Weight-loss plans can be effective,
but they require commitment to execute. Commitment is typically gained through
the planning process. It is also influenced by the culture. A culture with a
high level of trust can implement change faster and less expensively. In a
low-trust culture, the firm pays a tax through increased time and expense.
ACCOUNTABILITY AND COACHING
Change typically does not occur in organizations
where people are not held accountable. This is the No. 1 obstacle in most
firms, and I believe it's a reflection of the partnership form of governance
and a tendency to undervalue management. Organizations with a CEO form of
governance implement change with greater ease and efficiency. Accountability
starts at the top, and coaching is a key to successful change. Great coaches
build the team while helping individuals play to their potential (or even
REALITY AND COMMUNICATION
Every change management initiative has peaks and
valleys. Great managers prepare their teams for success and adversity during
the process. Knowing what to do during periods of adversity builds confidence
and commitment to get through difficult times.
The skills required to successfully implement
change are diverse. Don't hesitate to go outside of your firm to acquire them,
but remember that you must do the heavy lifting. Consultants can help by
providing clarity, capabilities and accountability, resulting in time savings
and reduced costs.
The planning process provides the path and
clarity in an increasingly complex business environment. Simplification reduces
resistance and builds confidence, allowing an individual and an organization to
grow and reach the next level. Your strategic plan is the foundation for
managing change. Make sure it is relevant and up to date.