Gale Crosley, a US CPA and accounting firm consultant presents her views on strategic growth in the second part of a commentary about contemporary growth challenges in the industry
Our world is changing. Our markets have gone through a permanent shift in the landscape over the past 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.
Globalisation 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. Globalisation 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.
Succession and regulatory rigour
The ageing 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.
Specialisation and competition
Growth-minded firms recognise that the days of putting up a sign and waiting for business – any business – to walk in the door are over. Successful firms specialise, proactively identifying gaps in services, then filling them with innovative, market-leading offerings.
This is especially important in a mature industry such as ours, characterised by fierce competition and an abundance of practitioners – more than 700,000 CPAs, and even more chartered accountants worldwide. This excess drives commoditisation of services and pricing. Specialisation 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 globalised specialisation 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 centrepiece 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.
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 flip chart – globalisation, succession, regulation, specialisation, 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 strategise and identify the best approaches to impact positively your future growth.
*Gale Crosley, CPA, consults with accounting firms on revenue growth. She was selected one of the Most Recommended Consultants in the Inside Public Accounting BEST OF THE BEST Annual Survey of Firms for nine consecutive years, and one of the Top 100 Most Influential People in Accounting by Accounting Today for eight consecutive years. She is an honors accounting graduate from the University of Akron, Ohio, winner of the Simonetti Distinguished Business Alumni Award, and an Editorial Advisor for the Journal of Accountancy. Most recently she was awarded with the 2014 Hall of Fame Award by a think tank The Advisory Board for he significant contributions to the accounting profession.