Howard’s Inner Circle, No. 40: The Literal Disconnect

I have always been intrigued by marketers and their interactions at accounting firms. Perhaps it is because, in my opinion, the role of marketers hasn’t been fully determined, or better yet, agreed to at many firms. The actual often conflicts with the expected and perceived roles.
Surprisingly, sometimes unwittingly, the marketer actually eliminates their position at the firm by being too successful as management then questions the cost and need of a highly-paid marketing director when its marketing efforts have matured with regard to branding, proposals, pipelines, and collateral materials.
Contrast that to firms where the seasoned marketing director is a vital and integral contributor to new business development and strategic planning. I believe these particular firms are enlightened, in part, because their marketing directors have a keen understanding of management at their firm and how to build a professional relationship deeply imbued with trust and respect.
It is important for relatively new marketers to develop a roadmap for professional success. The Association for Accounting Marketing can help with tools and in finding mentors. One tool, if it is still available from AAM, is a CD of the Managing Partner Panel Discussion from the AAM Executive Leadership Conference (February 2008), which Thalia Zetlin and I co-moderated. It provides an insider’s look at what it takes for a marketer to earn the trust, respect, and a voice in a firm’s strategic direction.
I would also recommend reading I'm Right, You're Wrong, Now What?: Break the Impasse and Get What You Need by Xavier Amador. With the commodization of services and changes in the nature and number of referrals, the importance of relationship building has increased. Although the firm/client relationship is all important, the first relationship that needs to be built properly by a marketer is their relationship with the firm, otherwise an unperceived impasse could doom a marketer’s future there.
© 2011
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Above may be reproduced in full if that fact is stated and Howard Wolosky at http://howardwolosky.blogspot.com is credited as the author. Note: The above also appeared on the Association for Accounting Marketing group LinkedIn site in the discussion and received a number of comments.

Howard’s Inner Circle, No. 13: Two Diverging CPA Firm Business Models

Being a detached, independently paid and unpaid observer of CPA firms for over two decades allows me to freely comment.

The early successful business model was a firm with a number of rainmakers, often as little as two or three. They were great at business development especially via one-to-one contacts, and also adept at maintaining and working a tight referral network where referrals were expected to go both ways.

Over time, this well-established model has morphed itself into two new distinct business models. One is where those rainmakers have become the executive committee of a CPA firm that runs in a corporate style. Where previously, firm policies and strategies were hashed out in open discussion at partner meetings, decisions are now made at closed executive committee meetings. And no matter how it is sugar-coated, it is understood who are the powers-that-be, and how getting into the inner sanctum, the management committee, is only done by invitation or by a successful power play.

Contrast that with the second business model that also developed from the earlier rainmaker model. These are firms that strive to operate as a team with management building consensus and having a real understanding of the importance of the various individual’s contributions in the firm’s successes.

If I were to predict which of these two models will prove better, I would select the later. This modified team approach:
• Grooms successors;
• Encourages collaboration;
• Has greater multi-disciplinary capacities;
• Rewards innovation
• Promotes a firm-wide project management instead of a capture-what-you- kill mentality;
• Is more susceptible at building real working alliances;
• Taps well into intergenerational resources;
• Promotes widespread mentoring in both directions;
• Supports technology at all levels; and
• Is structured for everyone to be focused on their roles in business development.

In both models relationships remain the key, and referrals are still the main source of new business. The real difference is the lack of community in the corporate model. Although lip service might be given; it exists only in name and spin. The second model, the modified team approach, with a real manager rather than a CEO, truly promotes community. This approach will turn out better in the long run as all indications are technology, globalization, outsourcing and many other factors are permanently changing the rules of the game. Businesses and professional firms will be seeking to become members of various communities and will do so only by building trust and cultivating loyalty as the basis for relationships. Only one of these diverging CPA firm business models lives that.
© 2010
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The above is from the newsletter, Howard’s Inner Circle, which periodically appears on the blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is credited as the author.

Howard’s Inner Circle, No. 10: 2011 Accounting Cover Stories

For many years each month as editor-in-chief of Practical Accountant I decided on what would be the cover story. It wasn’t hard do but for one fact; we had to decide on the subject matter as much as a year and a half before the issue came out. The reason was the editorial calendar had to be in place in July of the preceding year and there was no guarantee that each month there would be a development affecting the accounting profession worthy of cover story coverage.

Because habits are hard to break I decided why not have some fun and pick out 12 possible 2011 cover story candidates now for a magazine for the accounting profession.

Tentative and Very Hypothetical 2011 Editorial Calendar
January--Plethora of Estate Tax Engagements
February--How CCH, RIA, Intuit, LexisNexis, and Others Are Utilizing CPA Firms as Business Partners
March--Reverse Mentoring: Overcoming a Firm Management’s Deep-Grained Aversion
April--Success Stories and Best Practices from Early Social Media Adopters
May--Increasing Revenue and Correctly Positioning a Firm During an Economic Downturn
June--CRM: What Firms and Clients Are Doing Wrong
July--Regionals Replacing Nationals as Auditors of Public Companies
August--Outsourcing Manufacturing and Distribution Functions
September--Walking the Cost-Cutting Walk: Fee Reductions on Modified Engagements Complement Advice
October--Tax Prep--Protecting Against Fee Erosion and Client Flight
November--The Practice Development Joint Ventures Art Form
December--Hidden Benefits of Firm Associations, State Societies, and Trade Groups
© 2010
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The above is from the tenth issue of the newsletter, Howard’s Inner Circle, which periodically appears on the blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is credited as the author.

Might Seem Counterintuitive, But It’s Not

Yes magazines are closing down right and left, but here’s an idea for a new one. The working title is “The Unemployed.” The working tagline is “Harnessing Their Untapped Power and Wealth”

It will explore and publicize what an untapped and extremely valuable resource the unemployed are. Rather than defining someone’s worth, “being currently unemployed” could be shown as equivalent to a respected profession at which you can work at becoming better at.

Contributing reporters, copy editors, artwork submitters, and technical support would generally be those who are unemployed. There would be included extensive bios on these individuals. Each issue would have three or four features, departments, and commentaries.

Here are three possible features for the first issue:
“Tales of Charitable Giving” detailing individuals who increase their charitable efforts. E.J., who while searching for his next career opportunity, is delivering Meals On Wheels to the elderly; helping out at Cancer Action, and leading a weekly walking group of seniors.
“Seller’s Guide to Selling Gold” explains that most gold is purchased to be melted down so gem worth isn’t generally considered and offers vary greatly, easily as much as 75% to 100%. When selling, it advises to check with a number of vendors and ask that offer stay open for a stated period of time. It points out items should be grouped and weighted together by their carat type to get best value and applicable state law should be checked.
“Overcoming the Stigmas: Yours and Theirs” deals with the psychological and stereotypical aspects of unemployment from the viewpoints of the unemployed, family friends, former colleagues, etc. There would be a number of personal experience boxes where individuals such as Warren Buffet, Bill Gates, and an out-of- work 58 year old former steelworker describe how they or people they love dealt and deal with unemployment.

Departments could feature reporting on state programs that allow employers to combine reduced work hours for employees with partial unemployment benefits and how industries are combating unemployment such as contractors, landscapers and interior decorators turning to staging and rehabilitation of personal residences. There would be a books to consider section showcasing such books as “No More Mondays: Fire Yourself-and Other Revolutionary Ways to Discover your True Calling At Work” by Dan Miller

The magazine would be print and online and be a paid subscription model with a code of responsibilities and conduct for subscribers, advertisers, and contributors. The annual subscription rate would be from $10 to $250 as determined by the subscriber with a deferral, if desired, by those currently unemployed.

For the purpose of transparency and full disclosure, I am suggesting this publication in part so that I would be considered for the position of editor-in-chief. I was previously editor-in-chief of Practical Accountant, and what particularly qualifies me for consideration was my last column there, which in a sense of poetic justice, was automatically published on the day after I was told it was my last day.

Excerpted Text of WebCPA column
“’New’ Alternatives to Layoffs
(January 13, 2009)
“In these tough economic times, as in others, there are many news items on companies declaring bankruptcies and announcing substantial staff cuts. What is different this time is that I am also reading about a number of cost-cutting strategies that are gaining in popularity and aimed at reducing expenses without disrupting business operations or laying off staff.
“Fortune 500 companies, as well as smaller ones, have stopped their employer matching of employee 401(k) contributions. Factories are being closed down for a specified period of time with the unpaid furloughing of employees. Unpaid holidays are being given. Then there are those businesses that indicated there will be no salary increases in 2009. And I just came across a report that one of the largest accounting firms in Israel is reported to have made across-the-board pay cuts of 5 to 10 percent, except for certain lower-paid staff. We are also seeing the introduction of four-day weeks.
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“These creative cost-cutting strategies indicate the economic downturn is impacting more, and they also reflect an expectation that it will continue for some time. On the plus side, in general, they also indicate that companies are developing an arsenal of intermediate moves short of layoffs or a declaration of bankruptcy.
“This aversion to staff reductions can be attributed to a number of factors, including that often operations would be impaired if cuts were made, skilled employees are difficult to replace, and once the economic times get better the company doesn’t want to be understaffed.
“Interestingly, there seems to be understanding and acceptance by many in the workforce who are affected by the end of employer 401(k) contributions, unpaid leaves, etc. It appears to be based on the belief that, ’At least I have my job.’
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