The Curator offers this insight from Joseph Tarasco, President of Accountants Advisory Group, LLC:
Increased pressure brought on by a post-recession sluggish economy, industry-wide consolidation and ever-increasing competition for clients and quality staff demand that CPA firms make strategic, operational and cultural changes to ensure a secure future. What made your firm successful in the past may not necessarily be the same formula that will lead to success in the future, thus creating the need for change. Properly managing change is extremely challenging and time-consuming; however, it’s a key component to taking your firm to the next level of success and surviving the upward merger trend.
Charles Darwin once said “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” So goes it with accounting firms—it’s not the most technical accountants nor the smartest, but those partners and firms who adapt quickly to the marketplace changes that will thrive and remain independent firms of the future.
Assessment and Denial
The CPA profession is experiencing a rapidly changing business environment. It’s important to continuously assess a firm’s business strategies and objectives to take into account actual and anticipated external and internal influences. Periodically, a determination should be made regarding how these external and internal factors could influence the business, staffing and marketing objectives of the firm.
Established firms that have had some measure of success are more likely to be in denial because the “old way of doing things” worked for them and they have difficulty making tough decisions and adapting to an ever-changing CPA firm marketplace. They have not bought into Charles Darwin’s theory of survival of the fittest.
Denial is more endemic to firms with older baby boomer partners since it often results from stubborn adherence to a once accurate perception of reality that has become obsolete in a changing marketplace. It’s hard to overcome denial because it’s a comfortable state of mind—it normally means avoiding change.
Understanding and accepting the changing CPA firm profession is critical since it presents both challenges and opportunities. In addition, it plays a significant role in how to position the firm within the changing landscape.
Adapting to Change
CPA firms who want to avoid merging up into larger firms need to determine their optimal strategy given their partner and staff capabilities. They also need to consider their financial resources and take into account the current and expected future CPA firm business environment.
Changing with the marketplace is not an option, it’s the only way to sustain success over a long period of time and create a succession plan.
Changing to Achieve a Sustainable Competitive Advantage
In order for a firm to consistently deliver greater value to its clients and marketplace it must be able to design and deliver better services and solutions at the right fees to meet its competition head-on. This is only possible if the firm has the required resources and adapts quickly to a changing marketplace.
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