Reimaging CAS…a stimulus for growth!
While there are many definitions of CAS, it is not unusual for firms to struggle with transforming to a more advisory and consulting business. Recently I heard CEOs from leading firms discussing their names and brands. Should they call themselves CPA firms in the future or is that “old school” and limiting. While branding and naming are important, mindset and strategy will determine your firm’s ability to sustain success and become future ready.
At the same conference, there was much discussion regarding high growth areas and niches. One thing was clearly communicated. In order for CPAs and firms to transform, they must think differently (mindset), upskill (skillsets) and leverage technology (toolsets). This not a moment or event, but rather a journey that has already started and firms should start now or increase their investments in talent, training and technology. All progress starts with the truth and here are some questions firms must ask themselves to transform. Partners, don’t let those $100 bills in your ears impair your listening and learning abilities.
Do your people know what questions to ask to offer advisory and consulting services?
Do your people have time to work on higher level clients and engagements? Do they want to?
Do your people have the skill sets to operate in a unique ability team and offer multiple services to higher level clients?
Do your people have the skills to market and sell advisory and consulting services?
Do your people have the technology platform to provide transactional, compliance, advisory and consulting services?
Does your firm’s business model support advisory and consulting services?
Organic revenue growth is coming from advisory and consulting services in the Big 4 and Top 100 firms. There is no doubt M&A activity is at a peak with many CPAs transitioning into retirement but is this the answer to sustainable profits and growth? True transformation is different than optimization. It requires visionary 10X thinking. What would you do differently if your firm had processes that were 10 times more effective, services that created 10 times the revenue and talent that is 10 times more productive? These questions require a game-changing mentality rather than satisfaction with the status quo.
Most firms are experiencing higher turnover rates (18-20%) and more expensive talent. This should cause you to ask yourself, “do we have the skills for the future?” The answer is “No.” All of us must adapt and transform to remain relevant. Automation is entering every aspect of the business. Robotics, artificial intelligence, machine learning, blockchain and the Internet of Things are converging into a powerful force moving at speeds faster than any of us have experienced. Yes, there are challenges, but accounting firms have strengths and opportunities they have not drawn upon in the past. However, you must be willing to give something up from the past to leverage new opportunities.
Let’s look at most firms’ strengths, but go beyond traditional thinking. In the past, firms have always said their people are their most important asset, yet spent marginally on training and development. In the future, I see firms’ strengths as:
Their clients and trusted relationships – The Market Channel
Unique ability teams who can learn and unlearn faster than the competition
Their technology platform – Collaborate, communicate and create a unique client experience
Firm opportunities are more aligned with client opportunities than ever in the history of accounting. Clients are faced with the same challenges of talent, technology and trust. If you can transform yourself and your firm, you will be extremely relevant and valuable. The tools and skills are available today, but you must think differently and upskill.
Let’s look at some of the key skills advisory and consulting firms are seeking and developing.
These skills are different, but not difficult for trained professionals. The questions to make you successful at advisory and consulting services have already been developed. You just need to get comfortable asking a different set of questions and be prepared for clients to ask, “why haven’t you asked these questions before?” This is where marketing and salespeople can improve the client experience and shorten the sales cycle. Project managers are essential for multiple services and enhancing the client experience.
Now for the technology platform. While the platform is more complex due to the fact businesses are automating all areas and seek integration of applications and real-time data, this can be simplified significantly with some planning and strategy.
Who are your target clients for the future?
What services do those clients want and need?
Will you offer a different pricing model, e.g. subscription?
Who will lead this effort and who will you collaborate with (external resources)?
If you can answer these for questions, you are well on your journey to sustainable success and future readiness. This all starts with a vision (direction), plan (strategy) and culture (execution). If you don’t have these three, it will be tough, if not impossible to transform.