IN OUR OPINION, PERSPECTIVE #84 — May 28, 2019
(A Continuing Series for Leading CPA Firms)
“THE POWER OF ENVIRONMENT”
“ Performance more often comes down to a cultural challenge, rather than simply a technical one.”
— Lara Hogan, Etsy
As people entrusted with the earth for life, we have not been good stewards of the gift of our Environment. We squander our resources, trade the health of our environment for things and ignore the long-term effects of our actions. Not much different in most organizations. When we look at Environment within the context of a small and mid-sized CPA firm, another word we could use is culture. Every firm needs a positive and encouraging culture if there is any chance of success in implementing strategy or major process change or long-term success for that matter. Even when we have individuals who understand Purpose and take Ownership willingly (right motivation), implementation will fail if the right Environment (culture) does not exist. The path from “Talk to Results”ä becomes so much more of a challenge if a culture based on the wrong attributes and attitudes reflect life in the firm.
This is the fifth in a series relating to driving change and moving from “Talk to Results”ä. Previous perspectives have focused on the Power of Purpose – the Big WHY, the Power of Ownership and the Power of Willingness. Understanding the “P-purpose” provides emotional buy-in to the change and the “O-ownership” provides the commitment to the successful implementation of the change. Willingness provides the strength and Environment (culture) provides the oxygen.
Let’s start with a little insight into culture. There have been more books, seminars, articles on firm culture than most any other topic reflecting the critical role culture plays in a firm’s success. So, what is it? Culture can be defined as that overall Environment created through the combination of leadership, values, innovation, accountability and empowerment. Unfortunately, in too many firms, culture is window dressing and not reflective of the firm’s real Environment.
Firm culture is like the earth’s environment – it’s health and vibrancy reflect how we behave and what we believe our responsibility is towards the earth or in this case, the Firm. At the end of the day, firm culture is the only real sustainable competitive advantage over which we have 100% control. It is the glue that binds the firm together, whether positively or negatively.
The “E” in the POWER model, the firm’s culture, is what drives performance on many levels within a firm.
Let’s apply the “E” (Environment a.k.a. culture) to driving change in the firm and getting from “Talk to Results”ä. In our previous perspective, we wrote about how much more successful change implementation is when the individual(s) charged with driving that major strategy or process change are motivated to succeed.
Picture this. As the CEO of a small or mid-sized CPA firm, you have handpicked a team and team leader to implement a major growth strategy critical to the firm’s long-term revenue growth. The team leader and team members clearly understand the WHY, have accepted ownership with the right motivation and eagerly move forward. “Let me know if you run into any road blocks” states the CEO to the team leader. Looks like the implementation will be a great success, but wait, can culture get in the way?
The team leader finds that various partners who are critical to the success of the strategy are not always supportive, some get on board, some say they are too busy and some just don’t want to change. The team leader meets with the CEO to explain the road block and looks for help to remove it.
Losing Culture – The CEO tells the team leader that he/she shouldn’t expect all partners to jump on board and to work with the ones who are enthusiastic about the strategy. The ones that are too busy, or just don’t like change or think they are more important than the success of the strategy will never embrace it. Let’s move past this and work with the ones who want to work with you and forget the rest.
Winning Culture – The CEO and team leader discuss the road block and agree that the partners who are not cooperating need to be talked to and need to get behind the strategy and support the effort. The team leader agrees and together they develop a communication strategy around the best way to get all partners aligned with the strategy to remove the road block.
Question – which firm do you think reflects the culture to achieve success not only in implementing the strategy but successful as a firm?
Building a great culture – the goal of this perspective is not to talk about how to build a great culture but to illuminate how culture (Environment) is such a strong influencer in whether a firm can successfully implement major strategies or process changes. Culture needs to be built around shared values, innovation, having the right people, living the values every day and finally taking those who don’t reflect the culture to the woodshed once in a while. Firm culture is like the earth’s environment – it needs to be nurtured, respected and embraced.
One of the major road blocks to successfully getting others to accept change, whether it is a major strategic shift or major process change, is the natural resistance to change. People generally don’t like the unknown and become cozy in their day to day. The right culture will help everyone in the firm accept their responsibility for the firm’s success.
In Our Opinion, a shared culture built on characteristics such as teamwork, innovation, shared values, accountability will move your partners and staff from resistors to supporters – every time. It will make successful implementation of strategy or process change a shared value and will always move your firm from “Talk to Results”ä.
The right Environment (culture) within the firm when built upon Purpose, Ownership and Willingness will always successfully drive implementation of strategy and process change every time – moving your firm from “Talk to Results”ä.
Tony Zecca (CPA and retired CohnReznick partner and National Director of the Advisory Group) is a ESPOSITO CEO2CEO consultant who is brought into client assignments when needed. ESPOSITO CEO2CEO, LLC — a boutique advisory firm consulting to leading CPA and other professional services firms on strategy, succession planning and mergers, acquisitions and integration is actively led by Dom Esposito, CPA. Dom, voted as one of the most influential people in the profession for two consecutive years by Accounting Today, authored a book, published by www.CPATrendlines.com., entitled “8 Steps to Great” which is a primer for CEOs, managing partners and other senior partners. In Our Opinion, is a continuing series of perspectives for leading CPA firms where Dom and his colleagues share insights, experiences and wisdom with firm leaders who want to “run with the big dogs” and develop their firms into sustainable brands. Dom welcomes questions and can be contacted at either email@example.com or 203.292.3277.