Andy: So tell me a little about your background and why you are jumping back in with your new advisory practice after your stints as a managing partner for two significant firms.
Greg: Well, I guess I am a glutton for punishment. No, seriously, I always knew I was going remain active in the profession after my recent “retirement” as the managing partner of Schenck in 2018 and thirty-nine years in public accounting. I just cannot sit still and believe I have a lot to offer firms looking to grow and widen the breadth and depth of their services. Besides the most recent swell created by the pandemic, I strongly believe the building of more valued services is the most significant challenge that lies ahead for at least the top 200 firms today. It’s big. And from what I continue to hear from leaders and other advisors to our profession, I believe they too would agree with me.
My background is a bit unique, which puts me in a good position to help firms. I started my career at Wipfli in 1980 in Wausau, Wisconsin on the audit side when the firm was about $10M in revenue. In 1992, after my second year as an audit partner, I broke away to begin building and integrating our firm’s non-traditional services practice (People, Process & Technology). By 2001, when our non-traditional services approximated $8M of our total $40M in revenue, I took the managing partner position and moved us into our first three major markets of Milwaukee, Madison and Minneapolis by the end of 2004. At that time, we approximated $75M and were ranked 25th in national firm revenue rankings. Shortly thereafter, the wheels began to fall off internally as certain partners in our older secondary markets became uncomfortable with the rate of change being driven by the needs of our major markets. By 2007, I handed my leadership roll over to someone else and eventually left the firm as I simply lost my drive and desire to stay. In 2013, I was asked to become Schenck’s managing partner and agreed to a five-year term to see if I could help transform them into a regional firm with strong industries and integrated non-traditional services. In 2018, as my five-year contract was expiring, we merged into CliftonLarsonAllen for various reasons.
So as you can see, I am a builder and change agent. I’ve seen and been through a lot from starting in the trenches, building and integrating non-traditional services, to sitting at the helm of two very different large firms. Because of my many years of experience in diverse settings, I strongly believe I understand what it takes to build things and implement change within an accounting firm today and look forward to sharing my knowledge and wisdom with firms looking to evolve.
Andy: Maybe before we go too much further with this interview, please explain how you define non-traditional services.
Greg: I am glad you asked that question, as I believe there are many different definitions within our profession today.
Definition of Non-Traditional Services
I have always defined non-traditional as it is basically defined by the Big 4. Back in the 90s, the service categories included were:
People
Process (Operations), and
Technology
Quite often we have referred to this collection of services as the “three-legged stool” and/or “PPT.” This collection today in the Big 4 is pretty much the same, except now they have added “Strategy” as their fourth leg, so their stool is now a table referred to as “PPTS.” Over the past six or seven years, I have also referred to this collective group as “Business Optimization Services,” or “BizOps” since all four services focus individually and collectively on helping organizations “optimize” their resources, resulting in more efficient and effective operations.
Andy: Why do you think the need to bring more value-added services–specifically non-traditional–is the number one issue today in our profession?
Greg: That’s a very good question with a few dimensions to my answer.
Why the Lack of Non-Traditional Services is the #1 Issue in Our Profession Today
#1. Current services do not address most significant business issues of today.
The strong majority of firms today do not have services that address the top concerns of most businesses today. If our profession was really on top of it, the strong majority of the top seventy-five firms would be capable of offering services that address the issues that have business owners lying awake at night:
Top Six Issues of Concern of Business Today
New and continued growth opportunities
Attracting, engaging-with and building strong teams of people
Doing more with less and changing how they do things
Providing employees with better, more timely information to do their jobs
Protecting & securing proprietary and confidential information, and
Identifying and managing risk
The four core categories of non-traditional services I previously mentioned–People, Process, Technology and Strategy (PPTS)–do address these top concerns.
I know our assurance, accounting and tax services do bring value, but sad to say, today they are not hitting this list of what causes client sleep deprivation. As a profession, if we were current, our services would–or at least be strongly integrated with–the non-traditional services of People, Process, Technology & Strategy (PPTS).
#2. Clients & lenders are so much smarter today
What drives this begins with today’s business owners and lead financial people simply being much smarter and more capable today than they were decades ago. Not only from within our client base, but also the financial sector that has been our clients’ primary source of capital. As a result, the financial sector’s demand for requesting clients’ financials, to either be audited or reviewed, has fallen drastically and is therefore no longer the driving force of a significant portion of accounting firm revenue. Even when this assurance work does surface today, it has become so price-competitive that it’s quite often a “lost leader.” So, if you do not have more valued services, such as PPTS with stronger profit margins to follow-up with, why even do the “lost leader” work? Scary proposition.
#3. Advancement of technology
The continued advancement of technology has also accelerated the level of “client intelligence” that has further added to the commoditization of our services. We all seem to see and understand this, but have not changed our service offerings fast enough to maintain our level of relevancy.
#4. Industry expertise is no longer enough
I believe our clients are finally telling us that just being an expert in their industry is not enough. Don’t get me wrong, having industry expertise is still very important, but it’s no longer perceived as a differentiator–it’s now a commodity. Quite frankly, we’ve ridden that horse way too long.
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