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PrimeGlobal: Leading recovery beyond covid-19

Taking a longer-term perspective, PrimeGlobal CEO Steve Heathcote discusses what shape a leading strategy must take beyond the baseline expectations of an association’s disaster recovery plan


When I first started to write this article, I focused on what accounting firms have learnt about their disaster recovery plans (DRPs) over the Covid-19 crisis.

As I spoke to more partners across our member firms, I realised that DRP does not capture the mindset required to thrive once we move beyond the crisis.

The term DRP implies that if the right steps are taken, we can recover to where we were before. This will not be the case: the leaders of our firms recognise that they need to understand where the firm was, what is required now, and what will be required for the future.

The steps they take now should ensure the firm is moving in the right direction to take addvantage of this future opportunity. This means partners need to make time for forward thinking and take actions, even when immediate demands are so prevalent. Our firms are shifting their thinking from disaster recovery to leading the recovery. This is critical, as accounting firms will lead the way to win the global economic war.

 

How are accounting firms responding to the crisis?

Our member firms moved quickly as the crisis hit. I have been truly inspired by our firms’ leaders, who have put their teams and clients first in everything they have done:

  • Protecting staff well-being. Offices have been thoroughly cleaned and sanitary products made available to teams. Leaders have been highly visible. In one case, a managing partner manned their reception desk so their staff could look after their families;
  • Rapid move to home working. Firms have moved to fully service clients remotely in a matter of days – involving hundreds of staff;
  • Office support maintained. Emergency plans to redirect post, provide IT support and manage finance systems remotely have been implemented;
  • Focus on client needs. For many years, we have worried about the future of the profession when services are being automated. However, when the crisis hit, who you gonna call? For businesses large and small the answer has been their accounting firm. Elaine Pantel, partner at Shimmerman Penn LLP, said: “We have been proactive in helping our clients solve problems and assisting with cash flow priorities.” Teams have been focused on listening to client concerns and advising on how to obtain government support, reduce cybersecurity risk, and reduce non-essential expenditure. Much of the advice has been given without charge, with firms providing advice on social media and other channels, and
  • Our firms are collaborating. The culture of PrimeGlobal has been clearly on display. Our firms are collaborating and joining regular discussion groups. At a time when we do not have face-to-face events, connectivity and the sense of community has increased.

 

Undoubtably, the trusted advisor status of our firms has been considerably enhanced, which will have a positive impact for years to come. Our firms have also taken steps to ensure they remain resilient:

Scenario planning. Partners are preparing cash-flow forecasts in recognition that clients will find it difficult to pay for services. Firms are focusing on core services and stopping non-essential spend. Firms are doing all they can to protect their teams, as they know how valuable their people are for the future;

Maintaining productivity. Surprisingly, the move to virtual working is leading to more direct contact and attention to staff. Partners are adapting to a virtual environment and are investing time in virtual one-to-ones with team members to reassure them and ensure they remain focused. Virtual partner meetings are being held regularly to review productivity. Performance management is rapidly moving to a virtual model. Maintaining staff mental well-being is firmly on the agenda, with regular virtual social gatherings, quizzes and even costume parties!

Team skills and capacity. Teams are being redirected to support clients’ most immediate needs, particularly access to financial relief. Corporate transactions are not on the agenda right now, so teams are providing advice to build financial resilience. Where teams cannot be fully repurposed, professionals are being encouraged to complete their professional development so they are ready when the recovery begins. To help protect teams for the longer term, hours may be reduced, and planned internships phased.

 

How are accounting firms building resilience for the future?

Risk registers did not seriously consider the impact of a sustained global pandemic, which will be a learning for all businesses for the future. However, our firms have stood up to the challenge exceptionally well. To ensure long-term resilience, firms are taking steps that will enable them to be stronger beyond the crisis.

Neal Kilbane, US partner at Raich, Ende, Malter & Co. LLP and chair of PrimeGlobal’s world board, identifies a range of areas where the firm is responding to the crisis with future considerations clearly in their sights:

  • Adopting standard collaboration technology. The firm has accelerated the adoption of Microsoft Teams from Audit and Tax teams to, in Neal’s words, “every corner of the firm”. This undoubtably will increase efficiency for the longer term;
  • Sweating technology assets. The firm is identifying that there is opportunity to use the complete functionality of the technology services that they already have; for example, being able to bill remotely. Making more of existing technology services will increase agility in the future.
  • Realising the benefits of remote working. The crisis has demonstrated that teams can work remotely effectively. In the longer term, this will raise questions about real estate strategy for firms and their clients. 
  • Enhancing support capability. The crisis has highlighted that functions such as HR need to have a strong knowledge of areas such as personal data security, protecting the identify of those who become sick. They also need to understand the importance of recording sick leave for insurance and access to government relief. This will sharpen the focus of support areas for the future;
  • Moving to a new support model. IT support now needs to help remote workers who may be working at any time of day. The concept of nine-to-five support has moved to 24/7 support. This creates pressure on the IT support team which requires new ways of flexible working, and
  • Culture matters. Our firms’ priority to support their teams and clients has been strongly felt. Clearly defining the firm’s culture has helped at times when tough calls are required and builds client loyalty.

How will accounting firms lead the recovery?

The crisis is rapidly accelerating trends that were already in play. Kilbane comments that the firm is increasing consultancy to help clients interpret government relief legislation.

Professional skills such as empathy, listening, communication, insight and creativity are needed more than ever. Our firms are focusing on enhancing these capabilities across their teams. PrimeGlobal is offering a range of webinars to help develop these skills.

At this point, it is not possible to be definitive about which service lines will emerge as the strongest as we move into recovery. However, it is important for firms to identify core services and to be decisive regarding service lines that have been in decline for some time.

Decisions to exit service lines are often delayed in normal times. Now is the time to make the difficult decisions that many partners know in their hearts are the right ones. There will be some consolidation of practices as we move beyond the crisis, so firms need to be strong and to be the hunters rather than the hunted.

Business will need to be highly agile and able to respond to a bumpy recovery, where lock downs could be re-imposed for periods of time. Kilbane reflects that accounting firms can help lead the recovery by providing business agility services to clients, helping businesses move their teams to remote working, using technology to scale activity up and down, and using digital to extend revenue opportunities.

To win the economic war, we can perhaps learn from the Second World War. A fighter aircraft – the Spitfire – was key to turning the tide of the war, due to its speed and agility, as it could change direction rapidly and refocus on its target.

Accounting firms can lead the way in building Spitfire businesses that are able to respond to insight, be nimble, responsive and opportunity-driven. Keeping that goal in sight over these challenging months will be inspirational for us all.

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