The Importance of
Connections. Anyone who leads or manages a business (or any
organization for that matter) knows the importance of connections. Often times connections are defined in terms
of customers / revenue / success. In business, making connections with clients
and potential clients is everything.
Without an outlet for your services, there is no business. Same goes with not-for-profit organizations. Connections to donors and community leaders
who are supportive of your cause allow your organization to have the resources
to carry out your mission. And let’s not
forget about sports and other recreational organizations. Making connections with your fans and
audience is everything – you must put a winning and entertaining team onto the
field of play or stage in order to "connect” and generate buzz and excitement
in your communities.
However, beyond the obvious customer-type connections that
organizations must be continuously fostering and growing, there are other less
obvious (or ignored by leadership) connections that must be developed and
strengthened as well in order to have the organizations that potential
customers and supporters want to be associated with.
I was recently asked by an industry group for my thoughts
and feedback on the following question: "What do you think are some of the biggest
issues facing the profession today?”
The responses began to flow naturally for me and I began to realize the
theme centered on the idea of "disconnections” in many areas of our
practices. These disconnects can be
summarized into three categories:
- Training and Development
- Client Value
The Disconnect in
Technology. One of the main disconnects
I continue to observe in firms of all shapes and sizes is the multiple
disconnects in technology. This may come
as a surprise that I list technology in the disconnect category, because so
much emphasis and money has been devoted to expanding and growing technology
within our profession over the last few years.
The proliferation of vendors and products speaks to this scenario. However, I think the disconnect now may be
larger than at any other point I’ve observed over the past 5 years in the profession.
For starters, the gap between the technology savvy and the
technology "un-savvy” in firms doesn’t seem to be shrinking. There are numerous levels and groups of
individuals within firms who are able to skirt the process and not fully adopt
the new technology deployed. Many times
these individuals are operating outside the process – adding non-value added
steps and processes to others who have to mend the process to deal with the
outliers – and who are barely able to keep up as it is. And often times with just a little bit of
training a net gain in time savings could be realized if these individuals
adopted the process and technology the majority of the firm is comfortable
Second, as a general statement firms are not leveraging the
full scope of the technologies they have (and have paid for) to their
benefit. I often find within firms there
are multiple individuals who each understand and/or use unique features that
the majority of the firm doesn’t know about or has taken the time to learn. When we began taking an inventory of this
knowledge and ability, we quickly see a lot of opportunities for training and
time savings by adopting these internal technology "best practices” firm-wide.
The Disconnect in
Training and Development. We’ve all
heard the cliché "Your people are your greatest asset”. Unfortunately, many firms are failing in the
general maintenance, care, and attention given to these important assets. I recently wrote in one of my newsletters
about how, generally speaking, we are one of the leading professions in keeping
close track and measure our "CPE”.
Oftentimes firm-wide programs are utilized to track, manage, and measure
CPE. But, with that said, I think we’re
falling considerably short in measuring how productive the training is we’re
sending our people to.
It never fails, every firm I go to I hear at all levels
below partner the clamoring for more effective and hands-on technical and
leadership development training. But
there’s also huge disconnects. Staff are
begging for more hands-on training in the tax and audit programs, understanding
standards, understanding tax principles, etc…
They want to grow. But Managers
and Partners say they are getting sufficient training. How can that be? At the Manager level, they are asking for
more project management and leadership training. But often times they are "promoted” to
Supervisor and Manager based on their years of time put in instead of their
demonstrated competence in project management and staff development and are put
in this position to fail. As these
individuals struggle to keep up and manage, they aren’t spending enough time
training and developing the next group of leaders and it becomes a vicious
cycle. Firms end up producing a bunch of
what I call "zombies” who must always be told what to do instead of problem
solvers. How can that be?
The Disconnect in
Client Value. A major Lean Six Sigma
principle is understanding "The Voice of the Customer (Client)”. Therefore the disconnect I see in firms where
the Partners or Managers who are in charge of the client engagement and
relationship don’t understand what their clients value, I know how damaging
this can be.
Clients want value for the high fees they are paying. Even in this new economic reality of downward
fee pressure, clients want and expect more value. Clients expect their work to be handled
professionally and completed timely.
Clients expect to receive more strategic advice and guidance than what
we’re currently providing. They believe
any CPA can perform their basic compliance needs. They are paying your firm to be their trusted
advisor. To go beyond the basic
compliance and help them navigate their business and personal situations. As firms continue to struggle with their
processes and workload, the proactive guidance time is being squeezed out. This is not a good trend. Clients are beginning to feel they are paying
a premium fee for basic compliance services and nothing else – a recipe for
future client retention problems.
How Does Your Firm
Stack up with these Common Disconnects? I believe firms who continue to
underestimate the importance of improving and reducing these disconnects are
going to find themselves continually playing from behind in our new economic
reality. I always get back to the
fundamental principle that successful firms master better than their peers –
that principle of excellent client service.
When you have these disconnects, not only is it costing your firm time,
but it’s costing your firm current and future opportunities of providing
excellent client service.
Do you want to improve your firm? Tackle the disconnects and agree to the
- We must continue to reduce the numbers of people
in our firms who refuse to get on board with our new technologies deployed. Age is not an excuse (I know many
technology-savvy senior partners and managing partners). Client service is not an excuse. If these individuals want to be included in
the process of work for the client, they must follow the process.
- We must find ways to continue to leverage the
capabilities of our current technologies.
This means working together in cross-functional teams to improve our
knowledge and processes.
- We must understand that the best learning is
done one-on-one, collaboratively in our offices with our team. In order to progress and move up, you must
train your replacements. We can’t slack
on staff training and just "throw them to the wolves” with one day of tax training.
- We must understand that a promotion to
Supervisor or Manager means these individuals need to be demonstrating the
abilities expected of them – the ability to manage clients, projects, and staff
and develop their people.
- We must understand that client value goes beyond
how many "charge hours” we have into a job.
A client doesn’t care about the effort.
They care about results.
- We must find ways to provide higher value to
clients in order to keep our fees high and our competitors from poaching
clients. Being a trusted advisor means
doing so much more than just basic tax, audit or accounting work. It means helping the client navigate through
their personal and business decision making processes.
With more focus, measurements and rewards on these
activities, you’ll see a greater transformation in your firm and your
people. You’ll develop and build upon
connections, instead of disconnects. Challenge
the status quo and get results.
Dustin Hostetler is a Lean Six Sigma Master Black Belt and
the founder and Principal of Flowtivity, LLC.
He is the pioneer in applying Lean and Six Sigma principles within
public accounting firms. His firm works
with leading CPA firms to improve process efficiency and build the foundations
for profitable growth. Dustin also
teaches the industry-leading Lean Six Sigma CPA Green Belt certification
program in conjunction with The Ohio State University.