Caleb, it is very similar in how you boil a frog. I noticed the water was getting warmer but until I surveyed our partners in 2012 on how they were serving as trusted advisors, I had no idea how hot the water really was. Everyone was a trusted advisor and of course we were posting it on everything including the website like every other CPA firm.
As I began to interact with other firms on this subject, the complacency
was rampant. Again, everyone was claiming to be a trusted advisor.
Sounds like some classic herd mentality, no? Why do you think that is? That is, why do you think accounting firms are so susceptible to this kind of complacency?
Success naturally breeds complacency. This is true for any business not just CPA firms. CPA firms have experienced an abundance of success over the last 20 years that is unparalleled in our history. Due to a growing demand for our services, over time, we have become excellent at responsiveness and compliance while losing our entrepreneurial edge.
So if financial success breeds the complacency, how do you counter that? A lot of people won't see financial success as a bad thing.
Financial success is a good thing and a must to provide opportunity to people and growth to a firm. Everyone has to fight the natural tendency to find a comfort zone and begin to coast. David Maister referred to these partners as "Cruisers". You might call them campers as they can be at any level in an organization, if a person reaches a certain success level that meets their primary needs and initial dreams, people tend to relax or coast.
We also have to fight omission bias where we see more risk in something new or changing than we see in the status quo. If we were on an incremental curve of change like the last 20 years, coasting might work for the short term. However, our landscape is being changed exponentially which makes the status quo very risky. Even a KPMG survey of 400 CEOs pointed out that they expect more change in the next 3 years than the last 50!
How do you combat that? I believe you must communicate the "WHY" over and over again to establish the risk of the status quo. People also need a clear vision of "HOW" to continue being successful so that it overcomes their natural fear of change.
Wow, okay. So if I understand you correctly, the risk of complacency can fester pretty much anywhere.
Can this be addressed at the leadership level of a firm or does it run deeper than that? Does the culture of the firm need to become something akin to "We're never satisfied." ?
Someone said the greatest enemy of future success is past success.
Our profession has confirmed that with trusted advisor and rampant complacency. I do believe the only way to break past these challenges is with a strong culture that makes it okay to challenge the status quo. At HORNE, we embraced the mantra of Be Better which we have now evolved to Be Even Better.
Yes, leadership is critical but only effective when combined with a compelling vision.
Do you find that the people who come to work at Horne either love it or hate it? My thought is that if you're trying to create a firm that is constantly trying to push itself, that it won't work for everyone. Is that fair? Or would you characterize it differently?
I think that is a very fair question. First, we find that most people love it as we do not hide who we aspire to be. I do agree with your assertion that someone, who is not striving to reach their full potential, might find our pace too fast.
Another question we might ask, can we think of a place where someone will not see disruption and a growing learning curve? I find once people understand the "WHY," they embrace the journey even when difficult. Our profession is full of incredible, talented, ambitious people with an abundance of opportunity for those who strive for it.
Thanks Caleb, it's a privilege and honor. I really appreciate the opportunity to share.