Vision for the Profession 2014 and Beyond

Through my M&A experiences, I believe there are four distinct stages that are equally critical to the success of a transaction. » » » »

1st stage – Preparing your firm to compete in M&A. 2nd stage – Getting to the table.

3rd stage – Negotiation, Due Diligence, Agreement.

4th stage – After the Signing – Making it work.

My Formula for Successful Firms 1. R einforce often your firm’s priorities and core values to all personnel. This is the most important on this list.

2. Reinforce your firm’s WHY. 3. Never accept talent above character.

4. More often than not, people quit their boss, not their job.

5. There is a direct correlation between the fastest growing firms and the ability to attract, nourish and train people.

Develop a HR strategy that includes the 3Rs – Recruitment, Refinement (training) and Retention.

6. Implement a succession planning process that is effective and aligns with your firm’s overall strategy.

7. Exceptional client service is still king. Some of the tools are different, that’s all.

8. Deliver on your promises. The fastest way to dilute a firm’s culture is to not deliver.

9. Consider a M&A growth strategy and commit the resources and processes to do it the right way.

10. Sometimes, the best mergers are the ones you don’t make. In the 50 we made, we considered over 200.

11. Develop a strategic plan and well-defined vision that

builds excitement, is a stretch, has teeth, and provides opportunities for your people.

12. A s leaders, communications are the key to a synergistic firm. I have never been accused of over-communicating.

Communicate from the heart.

13. Listen.

14. S haring best practices with other firms keeps everyone fresh. Take advantage of your CPAmerica meetings, and other “outside the firm” opportunities.

15. S ome partners are not meant to be partners. It’s easy to procrastinate (I should know). Deal with it early, not later.

16. A ssure that your partner evaluations and compensation systems align with (and are not in conflict with) your firm strategic objectives. It’s difficult to reach those objectives if they are not aligned.

17. P artner accountability is essential for success in the future. Flying under the radar is not acceptable. Implement a partner evaluation system and partner compensation system that significantly rewards for performance.

18. H ave fun and celebrate victories.

As you see, my Vision for the Profession in 2014 and Beyond is very positive. CPAs have a high acceptability and confidence quotient, and we have earned it. Our job is to increase that quotient and pass it on to future generations. CPA firms are in an enviable place in the financial sector. We really do own the keys to our clients’ success, and the success and advancement of our personnel and firm owners. Take advantage of our unique position, and take your firm to new levels of prosperity.

Written by Carl George for CPAmerica International. Carl George has been in the profession since 1971. In fact, he spent his entire career with one public accounting firm – Clifton Gunderson. He started in an office with a volume of $200,000. Carl spent 13 years in the role of COO. In 1993, he was selected as his firm’s CEO, a position he held until 2009. The company’s volume was $50 million in 1993, and when he stepped down in a planned CEO succession transition in 2009, volume had increased to $250 million. Carl formed Carl George Advisory, LLC in 2013, where he consults with CPA firms in the areas of strategic planning, succession planning, merger & acquisition processes, and retreat facilitation. Visit: www.carlgeorgeadvisory.com or email: carl@carlgeorgeadvisory.com for more information.

www.cpamerica.org | 104 N. Main St., 5th FL, Gainesville, FL 32601 | Ph: 352-727-4070 | Fax: 352-727-4137

VISION FOR

THE PROFESSION 2014 AND BEYOND

C

ongratulations on another successful opportunity season.

I’ve always been fond of the term “opportunity season” for two reasons. First, it’s such a positive term and it projects such optimism.

Second, it affords us the opportunity to have so much client contact, which leads to better relationships, which leads to more work and opportunity for our firms.

Your Most Important Client is Your Own Firm While we see signs of economic recovery, there is still much to deal with both for our clients and within our firms. What’s important is that we take on these concerns and turn them into positive initiatives within our firms. Certainly, we learned some lessons from the recent downturn, and we made adjustments.

Carl George, CPA, CEO Carl George Advisory, LLC www.carlgeorgeadvisory.com

The Road Ahead I am extremely confident about the future of our profession.

There are signs of an economic recovery in our country, but our clients still have significant issues and need workable solutions.

Who better to work with those clients than our CPA firms? AICPA research puts our profession in perspective: » 3 out of 4 Business Decision Makers (BDMs) equate CPAs with INTEGRITY. »N early 70% of BDMs rely on CPAs for their EXCEPTIONAL competence. » 8 7% of BDMs respect CPAs as VALUABLE assets for their organizations. » 5 2% of BDMs rank CPAs as their most TRUSTED advisor, the highest of all finance professionals.

So, we have good reason to be optimistic about the future. We have worked hard at earning and maintaining these exceptional marks by our clients and the public, and we are positioned to reach unprecedented levels of performance in the future. We have the privilege of providing solutions for our clients, we can watch our firms reach new levels, we can help our people grow professionally, and we have the opportunity to earn an excellent living.

Here is my advice for 2014 and beyond.

It wasn’t easy, but we recognized that our most important client is our own firm, because our clients and employees rely – and have come to expect - a viable, healthy firm to be around for a long time.

I have been in our profession for 43 years, and as you might expect, I have encountered numerous opportunities and challenges. The key is to react -- but don’t overreact, be completely informed, be a team, implement policies, programs, and initiatives, and communicate to your people often.

I was the COO for 13 years and CEO for 16 years for Clifton Gunderson, and I would like to share some essential insights that hopefully will assist your firms in reaching those new heights.

Know Your Priorities I always make it a point to speak about priorities, as they are critical to assure the viability of our firms. While it may seem elementary to address priorities, I believe there are too many temptations and “ways to go wrong” if we don’t address them.

Candidly, our priorities should always be as follows: 1. Our firm 2. Our people and our clients 3. Self Firms can fail when these priorities are racked differently. We have witnessed this in the past and sadly, some firms don’t exist today because of a selfish few. Every single decision must be made with these priorities in mind.

Remind Them Why

Succession for the Next Generation

I believe it is important to periodically remind our people of why we exist as CPAs and consulting firms. The why for me is this: to help our people and our clients grow and prosper.

Many articles have been written about succession in our firms and we are improving. But, we aren’t there yet and we still need to make more progress. I believe that the number-one charge that each firm owner has is to protect and nurture the firm’s legacy and to pass it on in even better condition than how they received it.

That’s the very essence of succession. To accomplish that charge, an effective succession plan must be in place. Following are best practices from my experiences in working with many of my retiring partners.

That’s why we are in business.

It’s not to provide accounting, tax, and consulting services. Every firm does that. That is what we do, not why we do it. The difference maker is the WHY. In fact, our mission statement at Clifton Gunderson addressed the why. Very simply, it was, Growth of Our People, Growth of Our Clients. All Else Follows. To me, that says it all, and the why kept us focused.

Have a Well-Defined Vision and Strategic Plan The most successful firms are those that have developed a plan that outlines a clean and concise road map for prosperity – a welldefined vision. I have participated in scores of strategic plans, and I believe the most effective manner to develop that vision is through a “grounds up” strategic planning process.

My suggestions for an effective strategic plan are as follows: » Have a goal of developing a plan that is concise, no fluff, stretch, brief in length, and won’t be shelved after the process. » Include all thought leaders in the process. » Make it a hands-on strategic planning experience that takes the firm from 30,000 feet (vision) to ground level (implementation and tactics). » Have three-year rolling plans with one-year “report card” updates and changes. » Build the plan around the questions: What? When? Why? How? Who? » Gain the buy-in of all involved. » Break the plan and tactics into small pieces that everyone understands, and assign actions to all thought leaders. » Accountability – the key ingredient – include actions in individual goals, with monthly, quarterly measurements of progress by the goal owner. » Communications – constant enthusiastic communication of the plan progress at all levels of the firm. » Celebrate victories.

» Know that succession planning does not stop. It is an ongoing work in progress as people, circumstances, and conditions change. » Design a succession planning process that aligns with the strategic objectives of the firm and is practical to implement. » Early step – take an inventory of the bench strength presently in the firm, including gaps that need to be addressed immediately. » Include succession tactics in partner goals, and hold them accountable for attainment of the goals. » Align the partner compensation system to succession goals. If the system is in conflict with the succession goals, the system usually wins. » Develop (and communicate to other partners) exit strategies for those nearing retirement, acknowledge past and current value, and be certain that the partner “feels” the continuous value of the firm. » Develop a succession planning process for senior management in the firm, including the development of desired attributes for next generation leaders.

Mergers & Acquisition – A Viable Growth Strategy Almost every day, we read of two firms combining, and their leaders speaking to the strategic fit and culture match. In fact, M&A can be a viable growth strategy for your firms. As the COO and CEO of my firm, I participated in over 50 transactions, and over those years, M&A accounted for approximately 50 percent of our growth. As you might expect, M&A is not an exact science, and if you don’t have the processes and procedures in place – both premerger and post-merger – the risk increases.

CONTINUED ON BACK PAGE

C

ongratulations on another successful opportunity season.

I’ve always been fond of the term “opportunity season” for two reasons. First, it’s such a positive term and it projects such optimism.

Second, it affords us the opportunity to have so much client contact, which leads to better relationships, which leads to more work and opportunity for our firms.

Your Most Important Client is Your Own Firm While we see signs of economic recovery, there is still much to deal with both for our clients and within our firms. What’s important is that we take on these concerns and turn them into positive initiatives within our firms. Certainly, we learned some lessons from the recent downturn, and we made adjustments.

Carl George, CPA, CEO Carl George Advisory, LLC www.carlgeorgeadvisory.com

The Road Ahead I am extremely confident about the future of our profession.

There are signs of an economic recovery in our country, but our clients still have significant issues and need workable solutions.

Who better to work with those clients than our CPA firms? AICPA research puts our profession in perspective: » 3 out of 4 Business Decision Makers (BDMs) equate CPAs with INTEGRITY. »N early 70% of BDMs rely on CPAs for their EXCEPTIONAL competence. » 8 7% of BDMs respect CPAs as VALUABLE assets for their organizations. » 5 2% of BDMs rank CPAs as their most TRUSTED advisor, the highest of all finance professionals.

So, we have good reason to be optimistic about the future. We have worked hard at earning and maintaining these exceptional marks by our clients and the public, and we are positioned to reach unprecedented levels of performance in the future. We have the privilege of providing solutions for our clients, we can watch our firms reach new levels, we can help our people grow professionally, and we have the opportunity to earn an excellent living.

Here is my advice for 2014 and beyond.

It wasn’t easy, but we recognized that our most important client is our own firm, because our clients and employees rely – and have come to expect - a viable, healthy firm to be around for a long time.

I have been in our profession for 43 years, and as you might expect, I have encountered numerous opportunities and challenges. The key is to react -- but don’t overreact, be completely informed, be a team, implement policies, programs, and initiatives, and communicate to your people often.

I was the COO for 13 years and CEO for 16 years for Clifton Gunderson, and I would like to share some essential insights that hopefully will assist your firms in reaching those new heights.

Know Your Priorities I always make it a point to speak about priorities, as they are critical to assure the viability of our firms. While it may seem elementary to address priorities, I believe there are too many temptations and “ways to go wrong” if we don’t address them.

Candidly, our priorities should always be as follows: 1. Our firm 2. Our people and our clients 3. Self Firms can fail when these priorities are racked differently. We have witnessed this in the past and sadly, some firms don’t exist today because of a selfish few. Every single decision must be made with these priorities in mind.

Remind Them Why

Succession for the Next Generation

I believe it is important to periodically remind our people of why we exist as CPAs and consulting firms. The why for me is this: to help our people and our clients grow and prosper.

Many articles have been written about succession in our firms and we are improving. But, we aren’t there yet and we still need to make more progress. I believe that the number-one charge that each firm owner has is to protect and nurture the firm’s legacy and to pass it on in even better condition than how they received it.

That’s the very essence of succession. To accomplish that charge, an effective succession plan must be in place. Following are best practices from my experiences in working with many of my retiring partners.

That’s why we are in business.

It’s not to provide accounting, tax, and consulting services. Every firm does that. That is what we do, not why we do it. The difference maker is the WHY. In fact, our mission statement at Clifton Gunderson addressed the why. Very simply, it was, Growth of Our People, Growth of Our Clients. All Else Follows. To me, that says it all, and the why kept us focused.

Have a Well-Defined Vision and Strategic Plan The most successful firms are those that have developed a plan that outlines a clean and concise road map for prosperity – a welldefined vision. I have participated in scores of strategic plans, and I believe the most effective manner to develop that vision is through a “grounds up” strategic planning process.

My suggestions for an effective strategic plan are as follows: » Have a goal of developing a plan that is concise, no fluff, stretch, brief in length, and won’t be shelved after the process. » Include all thought leaders in the process. » Make it a hands-on strategic planning experience that takes the firm from 30,000 feet (vision) to ground level (implementation and tactics). » Have three-year rolling plans with one-year “report card” updates and changes. » Build the plan around the questions: What? When? Why? How? Who? » Gain the buy-in of all involved. » Break the plan and tactics into small pieces that everyone understands, and assign actions to all thought leaders. » Accountability – the key ingredient – include actions in individual goals, with monthly, quarterly measurements of progress by the goal owner. » Communications – constant enthusiastic communication of the plan progress at all levels of the firm. » Celebrate victories.

» Know that succession planning does not stop. It is an ongoing work in progress as people, circumstances, and conditions change. » Design a succession planning process that aligns with the strategic objectives of the firm and is practical to implement. » Early step – take an inventory of the bench strength presently in the firm, including gaps that need to be addressed immediately. » Include succession tactics in partner goals, and hold them accountable for attainment of the goals. » Align the partner compensation system to succession goals. If the system is in conflict with the succession goals, the system usually wins. » Develop (and communicate to other partners) exit strategies for those nearing retirement, acknowledge past and current value, and be certain that the partner “feels” the continuous value of the firm. » Develop a succession planning process for senior management in the firm, including the development of desired attributes for next generation leaders.

Mergers & Acquisition – A Viable Growth Strategy Almost every day, we read of two firms combining, and their leaders speaking to the strategic fit and culture match. In fact, M&A can be a viable growth strategy for your firms. As the COO and CEO of my firm, I participated in over 50 transactions, and over those years, M&A accounted for approximately 50 percent of our growth. As you might expect, M&A is not an exact science, and if you don’t have the processes and procedures in place – both premerger and post-merger – the risk increases.

CONTINUED ON BACK PAGE

Through my M&A experiences, I believe there are four distinct stages that are equally critical to the success of a transaction. » » » »

1st stage – Preparing your firm to compete in M&A. 2nd stage – Getting to the table.

3rd stage – Negotiation, Due Diligence, Agreement.

4th stage – After the Signing – Making it work.

My Formula for Successful Firms 1. R einforce often your firm’s priorities and core values to all personnel. This is the most important on this list.

2. Reinforce your firm’s WHY. 3. Never accept talent above character.

4. More often than not, people quit their boss, not their job.

5. There is a direct correlation between the fastest growing firms and the ability to attract, nourish and train people.

Develop a HR strategy that includes the 3Rs – Recruitment, Refinement (training) and Retention.

6. Implement a succession planning process that is effective and aligns with your firm’s overall strategy.

7. Exceptional client service is still king. Some of the tools are different, that’s all.

8. Deliver on your promises. The fastest way to dilute a firm’s culture is to not deliver.

9. Consider a M&A growth strategy and commit the resources and processes to do it the right way.

10. Sometimes, the best mergers are the ones you don’t make. In the 50 we made, we considered over 200.

11. Develop a strategic plan and well-defined vision that

builds excitement, is a stretch, has teeth, and provides opportunities for your people.

12. A s leaders, communications are the key to a synergistic firm. I have never been accused of over-communicating.

Communicate from the heart.

13. Listen.

14. S haring best practices with other firms keeps everyone fresh. Take advantage of your CPAmerica meetings, and other “outside the firm” opportunities.

15. S ome partners are not meant to be partners. It’s easy to procrastinate (I should know). Deal with it early, not later.

16. A ssure that your partner evaluations and compensation systems align with (and are not in conflict with) your firm strategic objectives. It’s difficult to reach those objectives if they are not aligned.

17. P artner accountability is essential for success in the future. Flying under the radar is not acceptable. Implement a partner evaluation system and partner compensation system that significantly rewards for performance.

18. H ave fun and celebrate victories.

As you see, my Vision for the Profession in 2014 and Beyond is very positive. CPAs have a high acceptability and confidence quotient, and we have earned it. Our job is to increase that quotient and pass it on to future generations. CPA firms are in an enviable place in the financial sector. We really do own the keys to our clients’ success, and the success and advancement of our personnel and firm owners. Take advantage of our unique position, and take your firm to new levels of prosperity.

Written by Carl George for CPAmerica International. Carl George has been in the profession since 1971. In fact, he spent his entire career with one public accounting firm – Clifton Gunderson. He started in an office with a volume of $200,000. Carl spent 13 years in the role of COO. In 1993, he was selected as his firm’s CEO, a position he held until 2009. The company’s volume was $50 million in 1993, and when he stepped down in a planned CEO succession transition in 2009, volume had increased to $250 million. Carl formed Carl George Advisory, LLC in 2013, where he consults with CPA firms in the areas of strategic planning, succession planning, merger & acquisition processes, and retreat facilitation. Visit: www.carlgeorgeadvisory.com or email: carl@carlgeorgeadvisory.com for more information.

www.cpamerica.org | 104 N. Main St., 5th FL, Gainesville, FL 32601 | Ph: 352-727-4070 | Fax: 352-727-4137

VISION FOR

THE PROFESSION 2014 AND BEYOND