four ways small firms can beat large ones

two partners celebrating business success outsidethink like an entrepreneur, not a technician.

by sandi leyva
the complete guide to marketing for tax & accounting

when i look through accounting today’s top 100 leaders list and the comments they have made about what they perceive to be the challenges in our profession, many of the answers are the same: change, talent and relevance are a few you’ll see. and they are all right to some extent, but there is a deeper systemic problem that i think could fix quite a few of these in one swipe. i’m not saying it will be easy, but it is a fairly straightforward problem once diagnosed.

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the most interesting part is that the smallest firms are getting better at solving this than the larger firms.

change

some people feel accountants are notorious at being slow to change. i used to agree when i was trying to help accountants get on board with new technologies in the 1990s, but now i disagree. i now believe accountants are spectacular at change. after all, we put up with hundreds of new tax laws every year, new accounting and auditing standards, blistering advances in technology, and changes in the economy that we don’t have a choice about.

the problem is there’s too much change for one person to handle. specialization will help the problem of massive complex change, but the problem is even deeper than that. i’ll come back to this in a minute.

the talent shortage

seventy-five percent of people leave their jobs because of their boss.

some leaders like to cite a talent shortage as our profession’s biggest issue. my question to those leaders is how good is your firm at delivering a great performance review? making sure your new staff gets all the training and challenging projects they can devour without feeling underutilized? communicates exactly what is expected of new hires and has it tied to a fabulous compensation system (not billable hours)?

i will never forget the regional firm i worked with that could not produce a job description when i asked about them. as soon as our profession can get better at training, supervising, motivating, rewarding, resource allocation and the big one – delegating at the right skill level – i would be willing to bet this will significantly alter any talent shortage.

when i did volunteer work in nepal, i saw a country with a backlog of 9 million bilaterally blind people who had three trained ophthalmologists in the entire nation to serve them. in my keynotes and webinars, i often tell the story about how they solved their “talent shortage.” there are some fabulous lessons in that model that can serve our profession.

relevance

most clients leave their accountant because of lack of communication.

i think relevance is a great answer to the question of what our top challenge is in our profession. one of the many reasons why we’ve lost relevance is because most firms do not have a fully functioning marketing department. when marketing is fully implemented, one of the major components is building and maintaining a feedback loop from clients to professionals that can serve as input into developing additional products and services that current clients clamor for.

going deeper

the thread that runs across all of these challenges in my view is that the business model the profession is using is pretty much obsolete. we need a business model that:

  • supports multiple career paths like accounting analysts, tax analysts, managers, marketing people and hr staff. this allows employees to specialize in all of the skills we need to function as businesses. that will ease the “change” and complexity challenges.
  • makes better use of leverage in every aspect – team, time, tools, resources, procedures and even clients.
  • contains all of the functions of businesses: marketing, new service development, planning, production, quality control, documentation, hr, technology, customer service and more.

it won’t happen overnight, but it doesn’t have to take decades either. many of the small accounting firms in accountant’s accelerator have made huge strides in the past few years. the first step they all took was to stop thinking like technicians and start thinking like true business entrepreneurs. they are all proof that accountants really can work less, make more and serve their clients better.