Latest / Transforming: Tales of Business Evolution / Governance Series: The Rise of Non-CPA Leaders in Public Accounting

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Governance Series: The Rise of Non-CPA Leaders in Public Accounting · Transforming: Tales of Business Evolution

0:01
Erin Hartman: Thank you for tuning in
0:03
to the special edition
0:04
Transforming Tales of Business Evolution Podcast,
0:08
focused on firm governance.
0:09
We hope you enjoy these
0:11
special episodes that are designed to
0:13
tie to and enrich our brand new PCPS governance toolkit.
0:17
Developed by the AICPA and CIMA,
0:20
the PCPS team, along with Gary Thomson,
0:23
Founder and Principal of Thomson Consulting,
0:25
and Sarah Dobek, Founder and
0:27
President of Inovautus Consulting,
0:29
the toolkit and these special podcast episodes
0:32
focus on decision making
0:34
and accountability within firms.
0:36
Whether firms are experiencing changes due
0:38
to internal growth, external market forces,
0:41
or other key triggers,
0:42
reevaluating current governance structure
0:45
can be a game changer.
0:46
Listen to all four episodes.
0:49
The episodes are hosted by Gary and Sarah,
0:51
and they're joined by practitioners who have
0:53
made these real-life changes in their firms,
0:56
and areas including the benefits
0:58
of using an operating model,
1:00
ideas to consider related to partnership agreements,
1:03
and introducing non-CPAs into
1:06
leadership roles and setting them up for success.
1:09
In the final episode,
1:11
Gary and Sarah share with
1:13
our PCPS team all about
1:15
what they've learned to drive success in firms.
1:18
Listen and learn about how proper governance
1:21
is not just something for big firms to think about.
1:23
It involves behavioral changes that are applicable
1:26
to even the smallest firms. We hope you enjoy.
1:30
Sarah Dobek: Hello, and welcome to integrating
1:32
non-CPA executives into firm leadership.
1:35
I'm Sarah Dobek with Inovautus Consulting.
1:38
I'm one of your co-hosts for today.
1:40
Today, I'm joined by Gary Thomson.
1:42
Gary, will you say a quick hello?
1:43
Gary Thomson: Sarah, it's good to be with you
1:45
again on this podcast.
1:47
I look forward to this continuation
1:48
of our series on governance.
1:50
Sarah Dobek: As the profession continues
1:51
to adapt and innovate,
1:53
one of the biggest shifts we're seeing is the rise of
1:55
non-CPA professionals stepping into
1:57
strategic leadership roles at accounting firms.
1:59
From operations and marketing to
2:02
business development and firm management,
2:04
these leaders are bringing fresh perspectives,
2:06
new skill sets, and a bold approach to growth.
2:09
Today, we'll be diving into what
2:11
that shift looks like in practice.
2:14
We're joined by a non-CPA managing partner
2:17
in his firm to hear more about the value that he brings,
2:20
the challenges he's faced,
2:22
and how his firm has
2:23
evolved by embracing diverse leadership.
2:26
Eric, if you'll do a quick introduction
2:28
for our audience?
2:28
Eric Majchrzak: Sure. Glad to be here.
2:29
Thank you, Sarah, and Gary.
2:31
Looking forward to this discussion.
2:34
My name is Eric Majchrzak,
2:36
and I am the CEO of BeachFleischman, based in Arizona.
2:41
I've had the CEO role since 2022.
2:46
But my background as
2:48
a profession is marketing, and growth.
2:51
That's been the majority of my career
2:53
in public accounting has been as
2:55
a marketing and growth leader for
2:57
two different firms BeachFleischman
2:59
being the one I'm currently at,
3:01
and prior to Beach was a firm in Western New York,
3:05
which was a top 100 firm,
3:07
and BeachFleischman is a top 200 firm.
3:09
Sarah Dobek: Wonderful, Eric. Let's jump in
3:11
and talk about this really important topic.
3:14
What inspired your current firm, Eric,
3:17
to bring in a non-CPA leader to such a key position?
3:21
I know you didn't quite start
3:22
in the position you're in today,
3:23
so maybe you can share a little bit of
3:25
that journey with our audience.
3:26
Eric Majchrzak: Sure, BeachFleischman I think I
3:29
started talking to them in 2010,
3:32
2011 and had the benefit
3:36
of having quite an in-depth conversation.
3:39
The firm at that point was about 14,
3:41
15 million in revenue and had made
3:44
a decision that they wanted to scale the firm.
3:49
They knew that they did not have
3:51
a formal marketing or growth program within the firm.
3:54
There was no marketing department.
3:56
I want to say they were managing it by committee,
3:59
so they had a marketing committee,
4:00
and that's how they were making their decisions.
4:03
They made a decision to bring an
4:06
''industry expert'' I'm putting it in quotes,
4:10
to come and develop a growth culture,
4:12
a marketing department, and
4:14
to grow and help scale the firm.
4:16
I came out here in 2012 to do that.
4:19
I came from New York State from another firm
4:22
that had already
4:24
a fully functioning marketing department.
4:26
I had learned some lessons at that firm I was
4:29
able to bring to BeachFleischman.
4:31
Gary Thomson: Eric, you and I've had
4:32
the privilege of working with you,
4:34
and so I know a lot about your mindset.
4:36
I really admired the way
4:38
you bring a different set
4:40
of the brain, if you will, to this.
4:42
Certainly, one of the trends in our profession,
4:45
particularly now with private equity
4:47
and other strategic investors,
4:49
is to look at what we
4:51
do differently on a day-to-day basis.
4:54
Thinking about it from a non-CPA perspective,
4:57
what are some of the skill sets that
4:59
yourself or other non-CPAs bring to a profession,
5:02
which at times, and since I'm one of them,
5:03
I can say this has been a little bit resistant
5:06
to thinking differently and
5:08
using the other side of the brain.
5:10
What are some of those skills,
5:11
and how has it benefited you and your leadership?
5:13
Eric Majchrzak: Sure. I think you just said it, Gary.
5:16
It was a different set of skills and experience.
5:20
Typically, I want to say with non-CPA owners of firms,
5:25
a good portion of them have
5:27
outside accounting profession experience.
5:30
They come from other industries.
5:31
I have banking in my background,
5:34
I have sales in my background.
5:37
Just bringing an outside
5:40
of the profession experience is important, I think,
5:43
especially in an industry that's
5:46
ever changing now with transformation
5:48
and disruption to see maybe more
5:51
holistically where that business needs to go.
5:56
In terms of a specific skill set,
5:59
I would say it's strategic mindset.
6:02
Then, also having mastery in
6:05
a business-critical function like marketing and growth
6:09
was something that BeachFleischman wanted on their team.
6:13
Just bringing that in-house to that firm so
6:16
that accountants didn't have
6:18
to manage that function by committee.
6:19
Gary Thomson: Eric, only because I've had visual into
6:22
the strategy work that you and
6:23
your firm did a couple of years ago.
6:25
I can't remember the exact timing of it,
6:26
but you definitely combined
6:28
your ability to take
6:30
abstract and make it concrete and have a plan,
6:33
etc., in a way that not only
6:35
appealed to a non-CPA and your function,
6:38
but also was something your partners connected with.
6:42
How has that evolved within your firm,
6:45
where they can take, again,
6:47
the other side of the brain and
6:48
relate to what you're trying to drive?
6:50
Eric Majchrzak: I think we're much more
6:51
intentional with our strategy now,
6:53
and having the background and
6:55
experience of a marketing professional,
6:58
I was very used to writing marketing and growth plans.
7:02
Well, that skill, after
7:04
I've done that for several years,
7:06
translates to a firm strategic plan.
7:11
It translates to a business plan.
7:14
I've written several business plans on behalf of
7:17
BeachFleischman for our different
7:19
joint ventures and subsidiaries.
7:21
Having that strategic mindset and
7:24
that framework for developing a plan
7:26
also translates to launching
7:27
joint ventures, new service lines.
7:31
Within those plans, as you know, it is holistic.
7:36
You're looking at the full circle
7:37
of that initiative, whether it's people,
7:40
talent, capacity, operations,
7:43
technology, funding, marketing strategy.
7:46
That's what I mean when I say it's holistic.
7:49
Really developing that language and
7:51
that dialogue internally has been very
7:53
important where all of our partner group now
7:56
really talks about the overall strategy of the firm,
8:00
the different aspects of it.
8:02
We also talk about how important
8:05
it is for leaders to get
8:07
their heads out of what's right in front of them.
8:11
They're silo, if you will, and
8:13
think more like business owners.
8:14
I think we've been pretty successful at that,
8:18
and that's been an enjoyable part of my role here
8:21
is keeping people focused on the overall strategy.
8:25
Gary Thomson: I have to say to our audience
8:27
before Sarah jumps in,
8:29
you won't see us
8:31
when we're doing this podcast. You're just hearing us.
8:34
But I'm watching Eric smile
8:36
as he's diplomatically walking through that,
8:38
because he's talking to me.
8:41
I'm a CPA coming up now
8:43
on 40 years in the profession, and I get it.
8:45
Eric, thank you for that diplomacy.
8:49
Maybe sometimes we're a little
8:52
hardheaded or stuck in our ways,
8:53
and there's a way for you to draw it out.
8:55
Just a little humor for the audience that doesn't see.
8:57
Sorry to interrupt, Sarah.
8:59
Sarah Dobek: No, you're good.
9:00
Eric, you're touching on
9:01
something that I think is so important
9:03
for the picture of transformation
9:04
in this profession today.
9:06
That's innovation. I've heard you say it.
9:09
You talk about these joint venture partnerships.
9:11
You bring this strategic element.
9:13
But one of the things and one of
9:15
the values that I think I can probably speak for
9:16
Gary and I that we see in having
9:18
a non-CPA leader at
9:20
the table is that they do bring innovation.
9:22
Can you talk a little bit more
9:24
about how that's transpired,
9:26
what that's look like for you all at BeachFleischman,
9:29
and your role in that more particularly.
9:31
Eric Majchrzak: Sure. Well, as part of
9:33
our overall firm strategy,
9:35
we just rolled out our newest strategic plan,
9:40
which will take us through 2028.
9:42
We've made a commitment to remain independent,
9:45
and we realize that if we're going to do that,
9:48
things have to change and evolve,
9:50
and transform over time.
9:52
Earlier this year, in January,
9:55
we launched an innovation center within BeachFleischman.
9:59
Right now it's internally focused on
10:02
transforming the business model, the revenue model,
10:06
our technology platforms that we use,
10:10
breaking away from legacy platforms,
10:12
the metrics that we use.
10:15
Essentially, a lot of it is innovation,
10:19
as we define it in our firm,
10:20
is taking a mostly inward-looking culture and firm,
10:26
and I'm really talking about the profession and how that
10:28
translates to a more outward mindset,
10:32
and the impact on clients
10:34
and what clients really care about.
10:35
For example, part of
10:38
our innovation journey is
10:40
reforming our revenue model away from ours
10:43
as units of revenue or
10:45
billable hours because we
10:48
realize that model is 100 years old.
10:52
We don't think as an ownership group,
10:55
that that model is going to make
10:57
us successful into the future,
10:58
where we're supposed to be embracing automation,
11:02
artificial intelligence, technology that's going to
11:05
severely shorten the duration that it takes to
11:10
get engagements out the door or
11:12
to deliver a product or a service.
11:15
The model has to change. That's part of it.
11:18
Then also how we define success,
11:20
instead of success measured by
11:23
inputs such as hours, utilization,
11:26
realization, outcome-based, things like turnaround time,
11:32
client satisfaction, engagement phases or steps,
11:36
or milestones, as opposed
11:37
to how many hours it took us to do it.
11:39
Things like that is
11:42
part of the innovation
11:43
and creating more value for clients.
11:45
We think that if we're going
11:46
to be focused more on clients,
11:47
we're going to deliver more value
11:49
than if we're focused more internally
11:51
on what accountants and the leadership cares about.
11:56
Just because it's efficient for
11:58
us doesn't mean it's good for the client,
12:00
so we have to figure out where that balance is.
12:02
Gary Thomson: Eric, both in
12:03
my public accounting career and
12:05
now as Sarah and I have
12:06
the privilege of working with firms,
12:08
I find this transition is always the difficult part.
12:11
Thinking about whether it's for firms who might say,
12:15
we're going from a partnership model to
12:17
a corporate model or in
12:18
the context of our discussion today,
12:20
going from a CPA as a CEO or to a non-CPA as a CEO,
12:26
what were some of the challenges
12:28
that might have been present at BeachFleischman?
12:32
How did you overcome some of those challenges and build
12:35
the trust level that was
12:36
necessary to get to where you are?
12:39
Eric Majchrzak: Some of the challenges, I think it was
12:41
evident I did not have a financial background.
12:44
I was not an accountant,
12:45
nor am I a CPA.
12:47
In our past, both Bruce Beach and Mark Fleischman,
12:51
our founders, were accountants and CPAs.
12:54
I needed a right-hand person
12:57
to be that side of the brain for me,
12:59
which I have in our president,
13:00
George Henderson, used to be
13:03
our audit department head, essentially,
13:05
he's our highest-level financial mind of the firm,
13:08
and I work with on a daily basis.
13:11
That financial mindset he can translate
13:16
stuff for me in a manner I can
13:17
understand that help me make decisions.
13:19
That was one challenge, I would say.
13:22
I would also say the way
13:25
a non-CPA executive leader
13:29
is measured in terms of metrics and goals,
13:32
our goals and metrics look much different than,
13:35
let's say, a line partner or department heads would be.
13:38
I have an overall growth goal for the firm.
13:41
That's part of my bonus, and
13:42
but a lot of my goals and metrics,
13:44
I'm judged on the success of those things,
13:47
and they're pretty strategic,
13:49
whether we want to enter a new market,
13:52
launch a new service, get
13:55
into a joint venture with another firm,
13:58
reform our pricing model.
13:59
That's the stuff that I'm
14:01
working on and measured on as opposed to
14:03
revenue for my particular area of practice,
14:08
or we're moving away, obviously,
14:10
from realization and those types
14:12
of standard metrics from accounting firms.
14:15
But figuring that stuff out took some work.
14:17
How are non-CPA owners
14:20
going to be what goals are they going to have?
14:23
How are they going to be judged in terms of success?
14:26
It just takes
14:27
a different type of conversation to do that.
14:30
We have a couple of non-CPA owners
14:32
in our firm, including our COO.
14:34
Gary Thomson: Eric, in correlation with that,
14:36
one of the early conversations
14:37
in the podcast Sarah and I did was
14:39
around how important it is to
14:41
define roles and responsibilities.
14:43
I imagine in the non-CPA context,
14:46
it may be is even more important.
14:48
We know in the CPA context,
14:50
to your point, what skill sets are,
14:52
what expectations, but how do
14:54
you and the firm whether it's your role,
14:56
your COO's role or other roles,
14:58
and even your president's role
15:00
because as you know, in many firms,
15:02
we can have a CEO and a chairman,
15:04
and sometimes if those roles aren't clearly defined,
15:06
we cause conflict as opposed to harmony.
15:09
How did you and BeachFleischman go
15:12
about just making sure roles
15:13
and responsibilities were understood?
15:15
Eric Majchrzak: Well, we're always looking at that stuff,
15:17
and I think it's evolving, and it's changed,
15:20
and we're in the process right now of updating
15:22
some roles and expectations for non-CPA owners,
15:27
for income partners and
15:29
non-CPA owners as equity partners.
15:33
We have a team that was put together,
15:35
I'll call it a task force and not a committee.
15:38
That committee had non-CPA representation
15:43
and CPA representation,
15:45
so it is a collaborative effort to define that.
15:47
But by and large, even for
15:49
the non-CPA owners of the firm,
15:54
are competencies align with that
15:58
of the competency model that
16:00
the AICPA puts out there and that we follow.
16:04
When you're creating roles and expectations,
16:07
so there's technical ability.
16:08
There's productivity, people development,
16:12
development of your team and leadership, client service,
16:16
skills, and then growth activities,
16:19
business development, or growth.
16:20
The non-CPA leaders in
16:23
our firm still follow those competencies.
16:26
It just looks a little different within there.
16:29
Instead of client service,
16:31
it's still client service,
16:33
but it's internal clients.
16:34
I don't have a book of business.
16:37
I'm not providing services to our clients.
16:40
They are, but I'm not,
16:42
but everybody internal,
16:44
I think of it as a service, essentially,
16:48
to make other successful in my firm,
16:50
and they are my clients,
16:52
whether it's my fellow partners,
16:54
or staff, or other key constituents.
16:58
There is some alignment there,
17:00
but it just within those competencies,
17:02
it looks a little different, Gary?
17:03
Gary Thomson: I really like that, Eric,
17:05
because I think of it as I talk to firms about staff.
17:07
An associate needs to
17:09
know their relationship to business development,
17:11
a client service, and technical,
17:13
but it'll be demonstrated differently.
17:14
What you're saying is, we use
17:16
the same competencies in the non-CPA framework.
17:18
We just redefine what success looks
17:20
like or achievement looks
17:22
like in each of those categories.
17:23
I like that. That's really insightful.
17:24
Eric Majchrzak: I would say, too,
17:27
for non-CPAs to reach that level of partner or
17:30
owner as part of the requirements,
17:35
we have to show the highest level of
17:38
certification in our field or credibility.
17:41
For example, our COO,
17:44
Karen Mattull, was our chief human resources officer.
17:48
She's got a couple two or three
17:50
designations after her name.
17:52
She reached the pinnacle of the HR world
17:55
in terms of credibility and
17:57
her designations and certifications,
17:59
and that allowed her to become
18:01
an owner in BeachFleischman.
18:04
With me, mine was more my involvement in
18:07
the national scene in public accounting and
18:10
having done a whole host of
18:13
webinars and training for
18:15
other accounting firms on growth,
18:18
being highly involved in the association for
18:20
accounting marketing, getting some acknowledgments,
18:22
some awards, and things like that,
18:24
put me above that threshold that was
18:26
needed to put me in that ownership group.
18:28
Sarah Dobek: One of the things that
18:30
we talk about a lot, Eric,
18:31
and I know you and I have had
18:32
this conversation is part of
18:34
transition is communication across the organization.
18:37
It's one thing for the leadership team to
18:39
believe in and probably the most important.
18:41
But then being able to translate across the firm,
18:43
building that credibility, so to speak.
18:47
How did you tackle some of that or how are you currently
18:50
tackling that as you bring in some
18:52
of these non CPA owners?
18:54
What's the message of the communication
18:55
been out to the firm and how have you
18:57
intentionally thought about that to
18:59
support this transition over the years?
19:01
Eric Majchrzak: For non CPAs in
19:03
leadership roles in our firm,
19:05
one of the first things we do is we get them plenty of
19:09
face time with our executive committee
19:11
or our board of directors.
19:14
They're always front and center
19:17
and we put faith in them and trust
19:19
to make their case if they're backing an initiative.
19:24
Our ownership group is
19:25
constantly engaging with them
19:28
in some way, shape, or form.
19:29
So visibility is very important.
19:32
Making sure that when we hold
19:35
things like management summits
19:36
or firm summits where we're
19:37
bringing everybody together that
19:39
those non CPA leaders have
19:42
a prominent role in
19:44
those events so that they're up
19:46
on stage, they're communicating.
19:48
That's very important.
19:50
Then just in general,
19:52
Sarah, I would say for my firm,
19:55
specifically BeachFleischman, our purpose
19:58
is about the power of
19:59
collaboration and what it can accomplish.
20:02
We have to live that and demonstrate it
20:05
on a daily basis.
20:07
It wouldn't be quite collaborative
20:09
if we were shutting out
20:11
a whole section of
20:13
our professionals inside the firm that
20:15
didn't have their CPA designation.
20:17
We include them in decisions in committees,
20:20
in task forces, and we
20:22
empower them to make those decisions.
20:25
But they still got to do
20:26
all the hard work like everybody else
20:27
does. That's pretty important.
20:31
But I think the key to success for that they
20:35
do need an ambassador, somebody who backs them, a mentor
20:39
if you will, who has their interests at
20:41
heart when we're not in the room, so to speak.
20:45
I think that's important for success as well.
20:48
Gary Thomson: Earlier, Eric, I brought up
20:50
just the term or the word transition.
20:53
If we could think back to this big transition at Beach
20:57
and then as you
20:58
continue to bring folks like Karen that you mentioned,
21:01
one of the things that I find is
21:03
that we can bring in really smart,
21:05
really talented people,
21:06
non CPAs and CPAs alike for this matter.
21:09
But the transition on how we
21:11
integrate them into governance
21:12
and leadership is really important.
21:14
Move too quickly.
21:16
The traditional CPAs may get a little bit on edge.
21:19
They'll go from being collaborative and
21:21
having a say to feeling like
21:23
someone else has taken over.
21:24
At the same time, if you move too slowly,
21:26
then you frustrate the people
21:27
you brought in to do their job.
21:29
How did you and
21:30
your firm transition as you
21:32
professionalize your C suite,
21:35
brought in the Karens and the
21:36
Erics and others of the world?
21:37
What did that transition look like
21:39
and how were the CPA partners,
21:41
ones that maybe moved at a little bit of a slower pace.
21:44
How did you get them
21:46
the confidence and trust they needed in that transition?
21:49
Eric Majchrzak: Yeah, speaking from
21:51
my personal experience,
21:53
transitioning into the role of CEO was
21:56
a two year experience for me.
21:59
Now, some people may say, that's way too long.
22:01
I'm actually grateful I had that time,
22:05
but it was a very involved transition where I met with
22:10
my managing partner on
22:13
a weekly basis and we carved off some time together.
22:16
We went over every aspect that would touch the CEOs,
22:19
come across the CEO's desk,
22:21
whether it was clients,
22:23
the financial aspects of the firm,
22:26
risk, growth, insurance for the firm,
22:32
health insurance, legal representation,
22:36
governance, all of that stuff, talent, technology.
22:40
We would sit down and depending on
22:43
what area I was talking about with him,
22:45
we would bring people into the room
22:47
to essentially inform
22:49
me of what the key issues are with some of these areas.
22:54
The firm wanted me to go through
22:56
a boot camp which I did.
22:58
I went through a managing partner boot camp which was
23:00
really important for me,
23:02
which I enjoyed very much.
23:04
Ironically, the managing partner boot camp
23:07
did not have a financial module.
23:11
I have to get that acumen and that skill set elsewhere.
23:16
But that's something I'm learning over time.
23:19
But I would say generally,
23:21
because our firm was focused
23:23
on the future and remaining independent,
23:25
the partner group understood that
23:28
there are different forces hitting
23:30
their profession of disruption,
23:32
whether it's emerging technology,
23:34
whether it's private equity,
23:35
the need for growth,
23:37
the talent shortage, any of that stuff,
23:40
it forced us to ask the question,
23:43
is the future success of our firm better suited with
23:47
experts in some of these areas
23:49
that are non traditional accounting,
23:52
nontraditional areas like growth, technology,
23:55
talent or are we bound to
23:59
the past the way CPA firms have always
24:01
done it with a traditional CPA firm model?
24:05
Our group was very
24:09
open to the fact that we are going to need
24:11
different skill sets to tackle those areas.
24:13
Sarah Dobek: Speaking of skill sets,
24:14
I think we know how important it
24:16
is to develop leadership skill sets.
24:19
When we talk about bringing in
24:20
non CPA leaders and changing our business model,
24:24
a lot of what we're doing is also changing how we
24:26
lead and empower others to lead.
24:29
I've seen this transition over the years.
24:31
But what are some strategies
24:33
that have been effective in developing
24:35
leadership skills among other non CPA leaders,
24:39
whether they have ownership in the firm or we're
24:41
bringing them along and
24:43
empowering them to be part of
24:45
the leadership team for the firm.
24:47
How have you done that?
24:48
Eric Majchrzak: We have our own internal development
24:50
effort like a lot of firms do.
24:53
Ours is called Develop U,
24:55
which is our internal training arm.
24:57
All leaders in our firm are
25:00
eligible to go through those programs.
25:02
It's everything you think it would be.
25:04
It's the core competency type stuff,
25:07
it's soft skills, it's leadership training.
25:10
All of our employees actually
25:13
are encouraged to go through
25:15
that program or take those different training modules.
25:20
Then also for outside,
25:22
training and leadership development
25:27
in Phoenix and in Tucson here,
25:29
where we're located, there are
25:30
leadership programs that are part of those cities.
25:33
We send non CPA owners to those programs.
25:37
We're involved in the Leading Edge Alliance.
25:40
There's all sorts of abilities for
25:42
non CPA professionals to learn about the profession.
25:47
We take a lot of people
25:49
to those conferences so that they can
25:51
learn those skills and understand
25:52
the broader context of
25:54
what's happening in the profession.
25:55
I think that's critical for leadership.
25:57
Then also, I think I just mentioned this earlier.
26:01
We do give our people a lot of face time in front
26:03
of the key stakeholders in the firm.
26:06
Our HR leader will come in and present to
26:10
the executive committee, our IT leaders,
26:12
our marketing leaders.
26:14
That's a good training ground for
26:16
the real thing and that's how they build trust.
26:19
That's how they see them in action, so to speak.
26:23
They're actually visually witnessing
26:27
them in front of a room,
26:29
making a case and so all that stuff is very helpful.
26:33
Gary Thomson: I note for you and Sarah, in my travels,
26:35
I'm listening to a book it's
26:36
a geopolitical book in
26:38
the history of the world, for that matter.
26:40
One of the things it talked about was
26:42
the shift that was made started in China,
26:45
went to ND and then made its way to
26:48
other parts of the world was around specialization.
26:50
When I heard you say that just a few minutes ago,
26:53
is what we were talking about
26:54
a couple thousand years ago.
26:55
Just tells you the CPA professions
26:57
finally catching up to that.
26:58
That there is this opportunity
27:01
for us to bring people who really know what
27:03
they're doing in certain areas
27:06
and then complement that with effective leadership.
27:08
Eric, I would love to think and say that
27:11
everything's just gone rosy for you,
27:14
that all your partners bought into
27:17
it and I believe they probably did buy into it.
27:20
But as you reflect back on the change
27:22
and the transition, have some lessons learned
27:25
for me and Sarah and the people who are listening to
27:27
this podcast that may be really intrigued with the idea,
27:31
understand it intellectually,
27:32
but maybe you're just challenged about.
27:34
What are some things that you'd say, boy,
27:36
I would absolutely do it the same way or I
27:39
might think about it differently as
27:41
you have an opportunity to reflect?
27:42
Eric Majchrzak: I think this actually,
27:44
in the case of where I am and geographically located,
27:47
Arizona did not have a requirement
27:49
that you have your CPA license to be an owner.
27:52
Where I came from New York State,
27:55
I think they just got rid of that
27:56
rule two years ago, Gary.
27:58
Gary Thomson: That's right. It's been very recent.
28:00
Eric Majchrzak: I could not be an owner
28:03
at my firm in Buffalo, New York.
28:07
It starts at the top and our partners at
28:11
BeachFleischman recognize that they
28:13
can make non CPA owners.
28:15
Ironically, the same thing now is happening in
28:18
the legal space in Arizona where
28:21
non lawyers can be
28:25
owners in law firms now
28:27
and it was the first state to do that.
28:29
I think that's the trend.
28:30
I don't know if there are any states
28:31
that are still requiring
28:34
that 100% has to be owned by CPAs.
28:40
I know there's different percentages,
28:42
whether it's a majority owned or
28:43
three quarter owned by CPAs,
28:45
but there might be one more state or two hanging out
28:48
there that still require a license to be an owner.
28:52
That's where it starts.
28:54
Number 1, the opportunity.
28:57
Number 2, I would say,
29:01
I think we spent a lot of time.
29:02
Maybe something I would do
29:04
differently or we would do differently is there
29:08
are subtle biases when
29:11
an ownership group talks about allowing or letting in
29:15
a non CPA owner into a firm and some of it might be
29:18
intentional and some of it might be not intentional.
29:23
But I would say maybe
29:26
raising those issues when
29:28
we stumble upon them, calling it out,
29:30
having that dialogue sooner rather
29:32
than later would probably
29:34
have served everybody a little bit better than,
29:39
it just took so long, I think,
29:41
for us to have this conversation.
29:43
It's a long dialogue.
29:45
It's not a decision you make
29:46
overnight and I think that dialogue has to start early,
29:49
and it has to be substantial
29:51
and everybody's got to buy into it.
29:54
You definitely want to have everybody on
29:56
the same page if you adopt a model like this.
29:59
Something that did work I think too,
30:02
is talking to peer firms that have
30:05
a similar model or the model that you
30:07
want and not having to go it alone.
30:10
One of the first things I did
30:13
when I became CEO is I started
30:15
calling other managing partners and
30:16
CEOs around the profession.
30:19
I reached out to
30:20
non CPA owners and had conversations with them.
30:23
Just finding your peers out there,
30:26
comparing notes and bringing some of
30:28
those lessons back to the firm is helpful.
30:31
Sarah Dobek: I love the idea, Eric, of curiosity.
30:34
I remember having one of those
30:35
conversations with you shortly
30:36
before your announcement years ago
30:39
and how exciting that was because
30:41
I knew what an impact this was going to
30:43
make in the profession and it was exciting to see.
30:48
Thinking about that, thinking about
30:50
the future and going forward,
30:53
how do you see the role of
30:55
non CPA leaders evolving in this profession?
30:58
What's your opinion on that?
30:59
Then what final thoughts or pieces
31:01
of advice might you give a firm that
31:04
is thinking about this journey or somebody that
31:07
is maybe in a similar role to
31:09
you that might be going down this path?
31:11
Eric Majchrzak: I think that the trend is already there.
31:14
You see it with private equity
31:16
increasing its reach into the profession.
31:18
These are, for the most part,
31:20
non CPA entities becoming owners and
31:22
firms in some level, at some level.
31:25
It's happening with that.
31:27
It's also happening, I would say with
31:29
the profession's continued push into the advisory space.
31:35
Moving away from the traditional firm model and layering
31:39
on advisory and consulting services
31:41
is part of the offerings.
31:42
Well, by definition, we're
31:45
going to have leaders in disciplines
31:47
that are not accounting related
31:49
that are going to be driving the success of that firm.
31:53
It could be a technology professional,
31:56
a financial professional, HR people professional,
32:00
marketing and growth professional.
32:04
With the push to advisory,
32:07
I think non CPAs are going to play
32:09
an increasingly important role
32:12
in driving the success of a firm.
32:16
Then I would say, in terms of advice to firms that are
32:20
considering doing this, I think again,
32:23
it goes back to where
32:26
do you want your firm to be in 5-10 years?
32:30
Where's the profession headed?
32:32
Where are your clients headed?
32:34
Then asking the question,
32:36
are we going to need more,
32:39
I'll say non traditional non CPA leaders to help
32:41
us navigate through all this disruption and change,
32:46
or are we going to need less?
32:47
I think the answer will be
32:49
if they pose that question that
32:50
we're going to need more leaders
32:52
with a different mindset,
32:53
with different experiences to bring
32:56
that skill set into the firm to
32:58
help make that firm more successful.
33:00
Gary Thomson: Eric, I couldn't agree more with that.
33:01
I really appreciate that and I think Sarah as you and
33:04
I have had the chance to connect Eric,
33:06
we've had a podcast on how process,
33:09
something like EOS helps governance.
33:12
We're going to have a conversation
33:13
around partnership agreement changes and
33:16
how they support governance and
33:17
your insight into a non traditional,
33:20
non CPA view, how we benefit from folks like
33:23
Eric Majchrzak running a firm
33:25
has been super helpful. As an outsider,
33:28
Sarah and I both having some visibility into your firm.
33:31
I think people just step
33:32
back and you said this very early in
33:34
the podcast and look at some of
33:36
the different things that you as a firm have done.
33:39
From acquiring and investing
33:42
in the outsourcing firm to thinking
33:44
differently about other service line offerings
33:47
and joint ventures and stuff.
33:49
It validates the diversity of
33:51
a mindset and kudos to you and your firm,
33:54
for one, being willing to do this, two,
33:57
for you being willing to take the risk of this and
34:00
then to see your firm embrace it and move forward.
34:03
For those that are listening to this podcast,
34:06
there's so many different ways to
34:08
be successful in governance.
34:10
You can look at BeachFleischman and
34:11
Eric's success and know that,
34:13
let's think differently and be willing to think
34:15
differently where the opportunity presents itself.
34:18
Sarah Dobek: Absolutely, Gary.
34:20
As always, you said it very well.
34:22
To those firms that are on the list that are
34:25
maybe not as large as a top 200 firm,
34:28
this can show up in so many different ways.
34:31
Part of it is just bringing people to
34:33
the table and allowing them to weigh in
34:35
on that strategy that I think is a great stepping stone
34:38
for firms that aren't quite ready to
34:40
make somebody a partner just yet.
34:43
I know, Eric, you didn't get there overnight and there's
34:45
a lot you didn't share with
34:47
our audience today about your journey,
34:48
but there's a lot of
34:50
baby steps before you got pulled in to be
34:52
the next managing partner or
34:53
the current managing partner of
34:55
your firm as it stands today,
34:56
but at the time, the next.
34:58
Eric Majchrzak: It's definitely been an interesting
34:59
ride and I will say
35:01
that there's no one way for a firm to do it.
35:04
I think it all depends on the culture of that firm,
35:07
what the overall goals are of that firm,
35:10
what they want to look like in the future.
35:13
There's not one way to do it.
35:16
We have our way, and some things work,
35:19
and some things weren't quite as successful.
35:21
But I think the key is,
35:23
Sarah and Gary is
35:24
we're developing a culture of taking some risks,
35:28
and so we're taking more risks.
35:31
We're having more at bats
35:33
on initiatives and as a result,
35:36
we're succeeding more, but we're also
35:38
failing in some areas and learning valuable lessons.
35:42
I think that's part of this.
35:43
It's the risk quotient of the firm and understanding
35:47
that you have to take
35:49
more risks to be successful
35:51
in this environment that we're in.
35:53
Sarah Dobek: Absolutely.
35:54
Gary Thomson: Well said.
35:55
Sarah Dobek: Gentlemen, thank you so much.
35:56
It's been an absolute pleasure.
35:58
I appreciate you joining for this conversation today.
36:01
Gary, thank you for being my co-host as always.
36:03
It's always a pleasure to do this with you.
36:05
Gary Thomson: Thank you, Eric.
36:12
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