Change is upon us. Driven by succession, globalization, technology, more sophisticated clients, and the values and expectations of the emerging Millennial generation, firms are being forced to adjust their long–range vision, their cultural norms, and their leadership, management, and service delivery strategies.
In this dynamic market, smart firm leaders will encourage their people—at all levels—to challenge the status quo and innovate new solutions to "age old" challenges like fee pressure, too much emphasis on the billable hour, the commoditization of compliance deliverables, workload compression, and more. But at the doorstep to success lurks the biggest threat to firms' ability to anticipate and adapt to the new market realities. That threat is the crisis of complacency.
Complacency is born out of the satisfaction and confidence that comes from reaching a certain level of success. When we reach that success, we feel like the things we've done and are doing are working "well enough" and that there is no need for change. Unfortunately, that's not true. Colin Powell put it well when he said, ‘If it ain't broke, don't fix it’ is the slogan of the complacent, the arrogant or the scared. It's an excuse for inaction, a call to non-arms."
I encounter many partners who are happy with the size of their client base, their current earnings, and the rate of return they receive relative to their effort. When we talk about the changes needed to drive growth, increase employee engagement and ensure the sustainability of their firm, these same partners calculate the perceived effort and investment to drive the necessary change. Then, they decide — either through inaction or direct action — not to make the changes that their people, their clients and the market require. The fallacy that they're operating under is that they can somehow keep things the way they are, when the one true constant is that things always change. As William Pollard said, "the arrogance of success is to think that what we did yesterday is good enough for tomorrow."
As I've been studying firms, I've been working to identify common symptoms of complacency. Here are four phrases I hear that signal complacency — and potential alternative ways of thinking to consider instead:
- "My client base is large enough — others need to grow theirs now in order for the firm to grow." This is the complacency of the rainmakers, who should instead be encouraged to transition their clients to partners or managers who may not have the ability to generate meaningful new business on their own. Then, rainmakers should focus their efforts on market making, growth and business development (and not client service). And if the firm's measures of success, compensation structures and buy/sell formulas don't incent the rainmaker to stay in action, those mechanical elements must change.
- "We can't make changes to our firm based on the different values of the younger generation. They don't yet understand our business model and why we can't ____________________ (fill in the blank)." First, we must teach the traditional public accounting business model and practice economics to our young people as early as possible so we can remove the "they don't get it" factor. Second, if the drum beat of the young calls for virtual work teams, flexible schedules, a deeper use of technology, results-focused measurements and more consultative, meaningful work, we must answer the call. But firm leaders don't have to —and shouldn't — generate the solutions alone. Instead, engage your up–and–comers in "guerrilla task forces" designed to study "old norms" and "new paradigms" and recommend specific changes, model potential ROI and drive the implementation of change. Pilot their ideas before implementing wholesale change and expect to make adjustments along the way.
- "These are issues that the younger leaders will have to solve when they take over (and when I'm retired)." Some, close to retirement, offer their support for change, provided it happens after they're gone. These comments are often delivered in an intentionally humorous manner, like the individual is joking, but their intentions are clear. These individuals want to hold off dramatic change that could threaten their current compensation level, impact their buyout calculation, or make them engage in more effort or different behavior that might be "uncomfortable" prior to leaving. But if the changes firms need to make cause the retirement or buy/sell programs to become economically untenable, all parties should share in the results of this discovery. And, who is better to provide counsel, identify potential problems, and coach your firm's change agents than those with the most experience and the most to gain from successful change?
- "Even though we have turnover, we don't lose good people to other public accounting firms. Instead, they go to industry or leave for personal reasons [and therefore anything we change won't help this]." This complacency troubles me perhaps most of all, because it abdicates responsibility for making the public accounting profession attractive, engaging and a real choice for the young, for women, and for others who leave. Who owns solving the problem of people leaving public accounting? I maintain that firm leaders within each firm do — and until we address issues to the fundamental model, we will continue to see some of our profession's best and brightest leave for supposedly greener pastures.
Middle age seems to encourage complacency — and so many of us are there. But when we quit striving and stop getting better, we lose the purpose and drive that gives our lives and work true meaning, and we lose our competitive advantage. Don't allow yourself and your firm to rest on your laurels or stop for a breather. I assure you that your competitors, your clients, your people and the market will not.
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Jennifer Wilson is a partner and co-founder of ConvergenceCoaching LLC, a leadership and marketing consulting and coaching firm that helps leaders achieve success. Learn more about the company and its services at www.convergencecoaching.com.