I believe we can agree, when asked to think of a “creative” or “innovative” profession or business, most at first would not say CPAs or CPA firms. But I believe, for example, that our profession’s response to the global market and ever-changing regulatory landscape are proof of how innovative we are as a profession. That said, the pace at which our world is changing today is going to require much more than a focus on growing revenue through new service offerings. In order to be resilient and remain relevant in the future we must develop a culture that supports and rewards innovation and creativity.
When it comes to culture, let’s look first at people. What motivates your team to strive for excellence? Why do they continue to come to work each day? What can we do to inspire and empower them to succeed? As evidenced by the 2014 Deloitte Millennial Survey, creating an innovative working environment will impact our ability to attract and retain talent. Deloitte found that “78% of millennials are influenced by how innovative a company is when deciding if they want to work there.” Furthermore, the survey found 70% of millennials might reject traditional business to work independently. These findings clearly indicate if we have not incorporated innovation as an element of firm culture, we may find ourselves unable to attract the talent necessary to grow and remain relevant. So how do we create an innovative culture?
Encourage and reward idea generation. If our single greatest resource is our people, let’s get them into the game. Our younger professionals often have the most interaction with our clients yet we often leave them out of the discussion when it comes to enhancements to service offerings or developing new services. We must teach our professionals to ask open-ended questions about clients’ biggest challenges, what is changing in their industry, and how we could better respond to the clients’ needs. Once we have gathered the data, have the team to work collaboratively to develop a service response to meet those needs.
Invest in developing and expanding knowledge. Many firms boast of subject matter expertise with respect to a specific industry. Unfortunately, the reality is the firm simply has accounting, audit or tax compliance expertise and a concentration of clients in a given industry. The ability to expand services or grow an industry niche requires much more than an understanding of financial and tax reporting. The key element in serving clients in a specific industry is knowledge, and knowledge is power! The development of consulting and problem solving skills in a niche practice requires a strong commitment to training and development. To create an environment that fosters innovative service offerings, the team must truly understand the environment in which the industry operates.
Invest in continuous improvement in technology and processes. Without question, technological advances have contributed greatly to the expansion of cloud computing and data management in recent years. In addition, these advances have helped expand services offerings for a number of larger CPA firms and specialized advisory practices. Many smaller and medium-sized firms have focused on leveraging technology to gain efficiencies in audit and tax processes, where cost savings through innovation matters. Most firms provide some type of financial incentive for attracting new clients; perhaps we should also offer rewards for enhancements or improvements to internal processes?
Create an environment where it is OK to fail. Over the years, I’ve witnessed many initiatives stall or die because of unrealistic expectations. Let’s face it, most CPAs are a bit risk adverse and this can impact change initiatives and stifle creativity. Whether developing a new service offering or refining an internal process, the amount to be invested in time and resources must be developed, the expected return on those investments must be realistic, and what constitutes success must be well defined. Too often a great idea never makes it to fruition because we killed the project too quickly expecting it be less costly, done more quickly, or that wed see profits right away.
Let’s be innovative and share some thoughts and experiences … What strategies does your firm use to foster idea generation? How does your firm monitor its changing environment? How does your firm approach the development of new service offerings?
I thought about researching “innovation” and providing more specific examples of innovation initiatives for consideration. After some reflection, and a bit of reading, I determined “innovation” can mean something very different to each of us. I would like to share something I learned during my time working with INCPAS advisor David Griffiths and the Society’s Knowledge Management Task Force:
The key is to be resilient, to be resilient we must gather and share knowledge, we must understand what is changing in our environment and that of our clients, and innovation is simply spending the time and resources needed to respond to those changes.