The firm of the future does not exist. Never has, never will. As my colleague Adrian Simmons says, there will be “firms of the futures.” Amen. There currently are, and will be in the future, many different types of firms doing many different things, led by many different leaders. There is no ‘right way’ when building an enterprise. Let’s stop searching for what does not exist. Building this elusive future firm keeps us focused on each other, a mistake that is beginning to become obvious to a new generation of accountants. We focus on ourselves by:
- surveying each other (the results are not changing us)
- benchmarking against one another’s business models (copying leads to mediocrity)
- moving to the cloud (the never-ending distraction)
- merging and acquiring each other (we’re still the same, just bigger), and
- eking out the never-ending efficiencies within our processes (but wealth creation is decidedly inefficient)
In my opinion, our profession is not headed towards changing our customers’ lives. We are only staying the same, just at a faster pace than before. Has our profession changed or created anything new in the past 25 years? We are a fearful bunch, and the state of my beloved profession is starting to worry me. We are even still teaching the accountants of the future the same way I was taught in the early 90s. I’m scared for us, and this has got to stop. We must become business strategists, enterprise builders, life changers, and lovers of people. We can become these things, but we must first learn what it means to build, run, and lead a real enterprise.
In his book, Uncommon Sense, Common Nonsense, Dr. Jules Goddard said
“Strategy is the art of first-hand thinking. It deals with one situation at a time. It finds its inspiration in what is unique to that situation. Strategic solutions do not generalize. They are built on insights, not rules or principles. Insights are small-scale, often short-lived discoveries. Something is noticed that had not been seen before. Entrepreneurship, the rare skill of marketmaking, is essentially the skill of producing just such insights and then having the courage and patience to apply them to the design of new products and services.”
According to Goddard, entrepreneurs: -make markets, -produce insights, -are courageous enough to act on those insights, -are patient enough to see the fruit of this labor, and -create new products and services We need more entrepreneurs in our profession that are not creating the firm of the future, but are creating their own unique firm. Notice some of the words in the above quote that we must become familiar with in building our businesses: art, inspiration, unique, insights, discoveries, courage, and patience. There is actually more room in business for intimacy than there are KPIs. Entrepreneurs often lead by their gut, rather than by rules. What holds us back from building the kinds of firms that are truly within our grasp? Not the fake firm of the future, but the firm we (you and I) were made to create? Here are some contrarian ideas to ponder as we seek to eliminate the idea of the one firm of the future:
1. Profit is the reward for daring to be unique. Those that make excess amounts of profit are those that are excessively unique. Profit is the reward to those daring enough to stand out. But our profession is still intently committed to doing what everyone else is doing. Sure, you may make 12% margins for the rest of your life, but thats it. You will churn through tax season for the rest of your life with little to minimum increases in your profit, year after year. It’s a high when you sell something new for large profit margins. You’ve just tapped in to the beautiful exchange of creating huge value for your customer, while at the same time capturing some of that value for your firm. Dare to be unique.
2. Business is a game to be won. You can’t win the same way twice. As an example, my own firm is moving into a new phase where I will be less involved in the day to day activities of the firm, and will instead think bigger thoughts. The growth strategies that got us to where we are now are not going to get us to the next level. Right strategy is creative thinking on your feet, and those who do it well, practice a lot and experiment, know the signs of when to make bold moves and when to sit it out. I’m finding that business is a fun game, one that only the artful win. You can gain many insights from business books, but they can’t tell you what to do at that instance when a client offers you potential ownership in their business in exchange for your knowledge. What do you do? Your ability to win will be based upon a right judgment of the risk and the bravery to move forward when you feel the time is right. We are all playing a game, so stop looking to your opponent for your next move.
3. Don’t grow accidentally. I coach business owners for a living. I know for a fact that business growth and making good judgments is done on purpose. At each and every stage of your businesses’ growth, you will be forced to make strategic decisions with the limited information you have. You must pick your positioning, know who you serve, say ‘no’ to the wrong team and the wrong clients, and decidedly raise your prices to test the value of what you are selling. You must do all of this on purpose. You may be able to make money in your business while failing to be a leader, but real wealth creation is reserved for those that decide. You have to wake up, and decide. And when you wake up tomorrow, you must decide again. Intentional leadership is your purview, and you must own it if you claim to be an entrepreneur. Firms that grow accidentally are horrible places to work.
4. Mergers of firms is proof of our un-differentiation. Can you imagine two technology startups deciding to merge? What if we saw a trend in the near future where technology startups began merging with one another? This would be disastrous. We know that these startups are highly creative, move fast, believe strongly in what they are building, and have investors that are betting on the brand new thing that they are building. The fact that two large CPA firms can merge is sad proof that all of our firms are the same. Two distinct, creative entities offering different values to different customers shouldn’t be able to merge easily. But it happens all the time. Maybe there is some dysfunction in the culture when the merger is over, but at least we get bigger, right? The fact that we are an undifferentiated profession is an indictment as to our incredible laziness to build value added companies. No wonder client and employee retention are big issues in our profession. We are all the same, and essentially just trading team members and clients with one another. No one is getting anything new, and it shows in our thin profit margins.
5. Managers are no longer needed. The idea of management was created around the industrializing of our world. We moved from agriculture to factories, and someone needed to manage all of those people, and all of those processes (I guess, but I almost doubt that too). We don’t need to do this anymore in professional work. We can work anywhere, and with any client. This means we get to recreate work more in line with our lives. We don’t need offices, and we don’t need work clothes anymore. If two people can get married, buy cars, and decide to smoke cigarettes, why do they have to clock in at 8:30 am every morning and ask for time off to go to the dentist? Who cares? We can now all just do work that we love, and stop the unfruitful and invaluable job of checking up on other people. That’s what Managers do – they check on other people. Fire all the Managers. So that is just a start down the road of contending with the elusive Firm of the Future. Can you make a goal to become more contrarian in 2015? Why not try something you’ve never tried before and see what happens? Thriveal is a community of contrarian firm owners that love to support those that try new things. Why not come join us?
Jason is the Founder of Thriveal and the Chief Innovative Officer of his CPA firm, Blumer & Associates. He is the co-host of the Thrivecast and The Businessology Show and speaks and writes frequently for CPAs and creatives, his firm’s chosen niche. Jason loves to watch documentaries on just about anything. He lives in Greenville, SC with his wife and their three children. Stay connected with Jason by signing up at JasonBlumer.com.