Latest / Transforming: Tales of Business Evolution / TfP 015. Governance That Builds Culture

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TfP 015. Governance That Builds Culture · Transforming: Tales of Business Evolution

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[MUSIC]
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Erin Hartman: Welcome to
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Transforming: Tales of Business Evolution,
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where we delve into the dynamic worlds
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of business transformation.
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Each episode is designed for
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firms of any size and scale,
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exploring both innovative long-term planning
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and day-to-day operating practices
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that help organizations adapt
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to a changing landscape.
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Join us each month as we hear from leaders
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in the public accounting profession
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sharing their experiences
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of reshaping their business models
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and inspiring you to explore new ways
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to evolve your own organization.
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Let's dive into this month's conversation now.
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Hello. I'm Erin Hartman,
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Senior Manager with the Firm Services team
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here at the AICPA,
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and I'm happy to be here with Suzanne Forbes,
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who is the CEO of James Moore,
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which is a top accounting firm in the Gulf Region,
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and they're headquartered in Florida.
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With our Transforming Your Business Model project,
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one of the areas that we focused on is governance,
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and we really wanted to talk to Suzanne because
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her firm has made a lot of adjustments
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and changes in their governance model.
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Suzanne, thanks for being here with us today.
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Suzanne Forbes: Thank you. I'm excited to be here and
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share a little bit about our journey on governance
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and the changes and the whys and the hows,
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and it's still a work in process,
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so we don't have all the answers.
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I don't know that there are any complete answers.
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Erin Hartman: That is all we can ask for.
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I think that's what we say in a lot of these,
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that it's always a work in progress,
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but it's better to start and start doing something
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versus wait until the stars are aligned
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for everything to work out perfectly.
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Before we get into the conversation,
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can you tell us a little bit about your firm,
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how big it is, the number of employees,
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offices and revenue sources and niches?
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Suzanne Forbes: Sure. As far as offices,
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we have five physical offices,
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but we have employees in 25 states
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and clients throughout the nation,
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and we do international work.
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I think we're going to hit 50 million this year
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and roughly 275-300 people.
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We have 17 equity owners.
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We have 21 partners,
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and we have two people on deck
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to become partners in a very short time here,
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so we are adding partners.
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We have a good bench strength.
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We have specializations,
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and we have our industry leaders,
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which is manufacturing and healthcare,
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real estate, construction, government,
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nonprofit, and then higher ed,
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and then our higher ed niche is a sub-niche
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into, primarily, a lot of university athletics
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as well as foundation works,
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so some of your component units of
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a larger university.
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We have two of our offices,
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one of them is in Gainesville,
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so that's the home of the Florida Gators,
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and then we have one in Tallahassee,
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which the Florida State Seminoles,
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so we have your great universities as well.
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Of course, the other great university
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is in Florida.
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That's a national practice that works
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with higher education clients across the country.
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We are expanding outside of Florida,
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but our primary focus has been
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Central and North Florida for local clients,
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but with our industry niches,
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we are definitely growing
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outside of any geographic footprints.
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Erin Hartman: The athletic focus of the universities
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is interesting.
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Is that a good recruiting tool for you?
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Suzanne Forbes: Sure, of course.
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I guess I could say, hey,
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you can come work on a lot
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of the different universities,
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and our social media, being at the football games
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and with basketball games
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and all the fun that that team gets to do.
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It's a very interesting time.
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If anybody follows sports,
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with the NIL and all of that,
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so we keep working with athletic directors
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on the compliance side, the financial side,
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all the legislation that's going on around it.
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We once said somebody tell us that
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changes in regulations is just opportunities,
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so that you need to look at them as
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opportunities for us to be advisory and help,
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be impactful, and be there for our clients.
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Our team is doing that, absolutely.
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Erin Hartman: I think that's very true.
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I feel that the best part of being a CPA
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is being able to learn about
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so many industries
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that you might not know otherwise.
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If it's one that's interesting,
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and you can see what that correlates into
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into real life, that's really cool.
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Talking about governance, this is a big question.
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I know it doesn't have just a short answer,
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but what really prompted
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your decision to redesign the governance structure?
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I'd love for you to walk us through that journey.
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Suzanne Forbes: Sure.
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Just a little background, too, first is
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I became a partner in 1995.
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I actually started with the firm in '87
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because I tell everybody I was five,
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but I'm not quite [inaudible] .
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I saw a lot of changes.
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I saw our firm grow from
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a very small partner group
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to a larger partner group,
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adding offices and number of partners.
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Our firm was managed or governed,
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and decisions were made really very much so
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at an office level.
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Everything was office-centric.
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For a long time, our decisions
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were made at the partner level.
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What snacks we were going to have at CPE,
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at training, were just talked about
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at the partner meeting.
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Eventually, we evolved out of that
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where every single hire or fire or
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raise or promotion got approved by
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the partner group as a whole,
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and we went to more of
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an executive committee structure.
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A lot of our operations in day to day,
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decisions were made by the executive committee,
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but the executive committee was
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our partners in charge of each office.
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We had, at the time, three offices.
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There was the executive committee.
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It was a three-office partners in charge,
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we call them PICs,
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and the managing partner,
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and our COO was our executive committee.
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Then we added another office,
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and so we made that a region,
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and that was Delay and Daytona.
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That was combined together.
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Then we added another office in Ocala
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and what was interesting was as we
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evolved to be
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more service line focused or business unit focused,
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so tax audit, ACS, consulting,
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and we also were more focused on not only industry.
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Now, we've got industries,
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we've got service lines, and we have offices.
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What really started driving it was
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I became managing partner in November of 2019.
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Nevertheless, of course,
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I joke with everybody
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that I did my state of the firm and
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my first year plan in
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January of 2020 and
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you know that COVID was not on that list.
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We had to pivot pretty quickly.
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Luckily, they'd already had a remote workforce,
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so we dealt with that.
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We were able to be operational within a couple of hours,
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100% remote being really relevant to our clients.
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I tell people that was probably one of the times that
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we're always relevant but
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talking about relevancy during COVID.
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But what we found was as we continue to grow,
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questions came up about,
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let's just say staffing,
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who was in charge of staffing?
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When I became managing partner,
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one of the things I really worked on was
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understanding roles and responsibilities
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within the firm.
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What roles did the PIC,
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partner in charge of the office have versus
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what roles did this service line leader have?
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What I found was when
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everybody was in charge, nobody was in charge.
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Erin Hartman: That's interesting that you bring that up.
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I was just speaking with
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Gary Thompson and Sarah Johnson Dobek
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on some governance resources that
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they have been working on for us,
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and they often talked about when things
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seem difficult nobody knows whose job this is,
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that's probably a time that you need
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to really evaluate your governance structure.
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Suzanne Forbes: That Part 1 was we
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created a jobs responsibility to this big matrix,
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and we were like, well, you're primary responsible.
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You're secondary, and you have to consult.
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There were a lot of crosses and intersections.
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Then about two, three years ago,
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we really started focusing on accountability.
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That was accountability.
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That was responsibility, authority,
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expectation, results, all of those things.
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We put in a strong what we call
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developmental coaching program for our employees,
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really meeting with them and helping them understand.
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I was responsible as
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CEO of the firm for doing the development
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coaching for our partners and
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our service line leaders and our office partners.
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What I found was there was
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no way to have any accountability.
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Those service line leaders
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couldn't have accountability over
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their service like tax revenues,
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expenses, growth or anything
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because they weren't in charge of staffing.
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The office PIC was.
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Then we made a small step
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and we made a move and we said,
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well, that's a problem.
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Let's put the service line leaders
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in charge of the hiring and firing.
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Well, that was really clunky for
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a year because then again,
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it was a little bit, well, that
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really does work in theory, but doesn't.
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That's when I went out and I spent
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a good probably year talking to other firms,
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CEOs, consultants, and I asked
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them about their governance structure,
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what I found was nobody had a perfect system.
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But everybody had things
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that they liked and didn't like.
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I would say, well,
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if you had to redo it all over again, what would you do?
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I spent a good year, year and a half and then
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took all the information and
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presented it to my partner group and said,
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here's what I have found through all the research.
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That's when they sat back and said,
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probably what we're doing we've outgrown now.
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If we're going to take us to the next level,
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we can't just be focused on a geographic office,
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not how we do business anymore.
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I think the change in the way we did business,
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one thing I could point to is the catalyst,
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because we were no longer
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working in our little office circles.
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Erin Hartman: Did all the partners
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know along the way that you were looking
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into this and recognized this
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as something needed to change?
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I know you said you presented it to them,
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but, were they aware of it?
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I want to know how that was?
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Suzanne Forbes: Not the first six months.
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I did talk to what was
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the executive committee and just said,
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lightly, hey, I'm looking at into this.
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Then I didn't have anything to tell the partner group
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because maybe I went and looked and what we
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were doing was great and perfect and whatever.
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I probably spent about six months,
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maybe nine months really,
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I would bring back what I found to
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the executive committee and
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get their blessing to move forward.
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Then once I got to the point where I felt
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I actually had something to let the partners know,
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and it was probably
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a year process with the partners still.
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Maybe it was a two year process.
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I think maybe it was
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two years from start
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really getting into it. It takes some time.
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You really got to do your homework.
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I had to talk to each of the partners one on one,
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and so we put a team to
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talk to them about what we were proposing and why.
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Erin Hartman: Now, did this involve relooking at
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your partner compensation at
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the same time or was that a separate thing?
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Suzanne Forbes: I think we could have done it
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without relooking at our partner comp,
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but we did end up.
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It was time because a lot of our focus our vision being
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an industry-driven advisory firm using innovation
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and technology to enhance
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client experience and provide
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a quality of life to our people.
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That's roughly.
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But when we started working on that,
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we also said, some of
12:41
our comp wasn't necessarily moving our vision forward.
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We knew that we were going to need to
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revamp our partner compensation to help
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drive our vision because
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your compensation is going to drive a lot of behavior.
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If you want your behavior focused around your vision,
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we knew that we needed to change that.
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Erin Hartman: You had those conversations as well when you
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were having these one on one
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conversations with each of the partners.
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How many partners did you say you have again?
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Suzanne Forbes: We had 17 equity, 21 total,
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and we also talked to directors invited to
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the partner meetings that they're on
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deck because they were our future leadership.
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Erin Hartman: Good for you for realizing
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that because we do
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see so many firms that the future leaders are there.
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They have ideas, they want to
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transform the way the practice is being run,
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but they're not able to because of current leadership,
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so good for you for recognizing that.
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I would love to know what pushback you got.
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Suzanne Forbes: A lot of questions on the details,
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and what I had to finally say to them was,
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it's not going to be perfect the first
13:50
time but it's going to be better than what you have.
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I did get another one of
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my partners who's really good with details
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to work with me because I'm more of
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a big picture where ideation, ideas and all that.
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He and I worked together, which was really
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helpful because you know what you're really good at.
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I knew I was really good at the vision,
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but I'm not as good or as patient about
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articulating it into all the details.
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We put together frequently asked questions.
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We put together a matrix of roles and responsibilities.
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We put together a charters,
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like a board charter.
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Actually, we implemented this November 1st of last year.
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We're actually coming upon our first year,
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and we just met Erin,
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her name is Erin too and I met on Friday to go over,
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what did we think?
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What changes do we need to make?
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When we go into our partner meeting this September,
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we just said, this is where we thought we were.
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These were the things we needed to clarify.
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I will give a plug to engage conference this summer.
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A lot of great materials,
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but one of the things I took away
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with under change management,
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we're all dealing with this was
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this concept of crawl, walk, run.
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I call it phases,
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Phase 1, 2, 3,
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and so I didn't use that terminology then,
15:21
but what we said is, we don't
15:23
necessarily want to be crawling because we were already.
15:25
You got to govern,
15:27
but we didn't have to have it perfect.
15:30
Those were a lot of the conversations.
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Partners wanted to know, what was going to change?
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What weren't they going to have decisions
15:37
on when we changed
15:39
governance and who is going to be
15:41
responsible and they want to make sure.
15:44
We really spent a lot of time talking
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about these are the things
15:48
that all the partners get to decide on.
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Because that was really important to them.
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Now, we're not going to admit a partner
15:55
without your say.
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You absolutely are going to say.
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We had to make sure we had that list
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of things that they were going to be,
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even simple I love
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it because even though we're 300 people,
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we're still very tight knit.
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But all the partners want to know when
16:13
somebody is no longer with the firm.
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I'm like, but if you don't work with them,
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why does it matter to you?
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Well, they still want to know.
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That was like, you'll get it.
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That's fine. But do you really need to know.
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A lot of it was so much around communication.
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They wanted more communication.
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Erin, my other partner that's working with me,
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she's been really great about helping communication.
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We have a Teams channel, and all our minutes for
16:41
every ops board meeting is in the Teams channel,
16:44
so anybody can go look at it.
16:45
There's so much information out there.
16:47
When somebody says, well, I didn't know that.
16:49
I'm like, well, here's where we
16:50
told you, did you go look?
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Because you spend 40 hours a
16:53
week just reading all the communications.
16:55
But if you need to know and
16:57
you can get all your work done,
16:58
then we need to communicate.
17:00
I would say over communicate and communicate and stuff.
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Erin Hartman: I think that's great advice in talking
17:07
to firms who are making
17:08
changes in their governance models.
17:10
We talk a lot about just what is that exactly.
17:15
I feel like it gets down to highest and best use.
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Make sure everybody's working
17:21
at their highest and best use.
17:22
Like you said, everybody doesn't need to be
17:24
involved in the snacks at CPE.
17:27
When you think about your highest and best use,
17:31
it's probably what you like to do.
17:33
I imagine people are happy that they're
17:36
not doing things they don't like to do,
17:38
they're spending more time on what they like to do,
17:40
but they also don't want to lose that control.
17:43
Yeah, what we've learned is like
17:45
communication is key to that,
17:47
and it sounds like you have
17:49
a little pushback about that.
17:51
I would imagine over time as
17:53
people see things running more efficiently,
17:56
people will get more comfortable with that
17:58
and maybe have a little less of what they even know.
18:01
Suzanne Forbes: I think there are just certain people
18:04
that want to understand everything that's going on,
18:06
and as an owner of the firm,
18:08
they have a right to do that.
18:09
There are other ones
18:11
who really just don't want to be bothered.
18:13
Not bothered in a bad way,
18:15
but they want to go focus on something else.
18:17
I had to get over it.
18:18
It's not a lack of trust by either one.
18:21
It's just that they want to be knowledgeable about it.
18:27
They don't want to be caught off guard.
18:28
They want to be surprised.
18:30
The way I look at it is by
18:32
making the communications out there,
18:35
people that want that communication have access to it.
18:38
The people that don't want that communication still have
18:41
access to it but don't need to spend their time on it.
18:45
Trying to find that balance really
18:50
supporting all the different levels of ownership.
18:54
But it was communication,
18:56
it wasn't decision making necessarily.
18:58
Our service line leaders do the hiring and firing
19:01
and so they may consult with you
19:05
if it's somebody in your office to let you know,
19:08
or hopefully, you're already aware if
19:10
there are growth plans.
19:13
Hey, we're going to hire these people.
19:15
There's, again, communication between the two,
19:18
but the decision rests with
19:20
the service line leader or the business unit leader.
19:24
Even though communication is great,
19:27
you still have to have who's going to make the decision.
19:31
If you don't agree with the decision,
19:34
you need to talk to that person,
19:36
but it's their responsibility, ultimately.
19:39
I think that's a really, really hard thing.
19:42
Erin Hartman: The communication is just
19:44
telling you what is happening.
19:46
It is not giving you a say so in what is happening.
19:49
You said it'll be a year in
19:52
November that you've made all these changes.
19:54
Have you involved any outside consultants or
19:58
any external parties to help you with this?
20:01
Suzanne Forbes: No, I did most of
20:02
the research on my own and listening to people.
20:06
But Gary Thomson, you mentioned earlier,
20:10
he's a great consultant.
20:11
I took on my research
20:14
and we engaged him to do in one of our partner retreats,
20:17
and I showed him where I was,
20:19
and I guess I got affirmation
20:21
from him that we were on the right track.
20:24
I felt we did I think we did a pretty thorough job.
20:31
I'm always listening and talking to
20:33
people, I would say,
20:36
but Gary Thomson was
20:37
my sounding board on it. Does this make sense?
20:41
Do you agree? Am I missing anything big?
20:44
What have you seen?
20:45
I think that's helpful too.
20:47
What have you seen out there that works or doesn't work?
20:51
One of the things we did was we
20:54
separated our operations from our board,
20:58
and so we have a board of directors that
21:01
consists of three partners
21:03
elected by the partner group and me.
21:06
One of the things that
21:08
the partner group wanted is they wanted that board.
21:10
That's a strategic board.
21:12
It's really just looking at
21:13
strategic visioning and stuff,
21:15
and then we have the operations board.
21:17
The operations board,
21:18
what the partner group did not want is they
21:22
didn't want people serving on both.
21:24
They were pretty adamant about that,
21:27
that they really wanted an independent
21:29
as the board of directors.
21:34
There were certain things
21:36
that the partners wanted
21:38
that I listened to and I took back
21:40
as we built our structure.
21:42
They also wanted to
21:45
make sure that we had new blood on the board
21:47
and we put in term limitations
21:50
on our board of directors.
21:52
Those are the culture things
21:53
that you have to
21:54
understand what works for your organization.
21:58
It's not for every organization,
22:00
but that's where you have to listen to your partner
22:02
to find out what was important to them.
22:04
There were a couple of things that were really important
22:07
to them that we made sure that we
22:09
incorporated into our governance model.
22:14
I think that's things that you have to listen to.
22:19
Now, we'll look at those and say,
22:21
do you rework them?
22:23
Does it make sense?
22:24
Everything is subject to change.
22:27
But that's our plan.
22:29
At least we have our plan.
22:31
Erin Hartman: Right. Can you talk a little bit
22:33
about partner comp,
22:34
and what that looked like prior
22:36
to changing and what it looks like now?
22:39
Again, whatever you're willing to share.
22:41
Another one of my questions is,
22:43
how transparent is that?
22:44
Because we're hearing a lot of different things
22:47
as far as how firms are looking at that now.
22:49
Suzanne Forbes: Everybody always asks first question,
22:51
do you have open comp or closed system?
22:55
People are like, tell me I'm crazy,
22:57
but we still have an open comp system,
23:00
meaning that all the partners
23:01
know what the other partners make.
23:03
But they don't necessarily go
23:05
into every item that goes into the partner comp.
23:10
There's transparency about what
23:12
components make up partner comp.
23:14
But if I'm going to sit there and go through
23:16
and publish out every single metrics,
23:19
we have a quality of book metric and quality of
23:22
book it's not the size of the book,
23:26
it's is it the right book?
23:27
Is it in your industry focus?
23:29
Are you doing advisory services?
23:30
What is your realization?
23:32
What's your leverage?
23:33
What's your percentage of advisory work?
23:36
All these qualitative factors,
23:39
and it was really interesting because in the past,
23:44
it was our executive committee that
23:46
was doing our partner comp.
23:51
As our executive committee grew,
23:54
because we'd have people transitioning
23:56
off the executive committee, coming on,
23:57
and we have 17 equity partners,
24:00
and then we ended up with six people
24:01
on the comp committee because
24:03
of people rotating off and on the executive committee.
24:07
Then we had partners that were doing the tax return,
24:11
and I was like, at this point,
24:12
I got half the partner group involved in partner comp.
24:15
I might as well just sit with
24:16
17 partners in the room and do
24:18
partner comp at that point.
24:22
It was just really interesting because
24:24
I had one partner come to me later and
24:28
say to me that they didn't understand why
24:31
another partner make so much more than
24:33
them because their volume was the same,
24:35
their charge hours are the same,
24:36
their business development was the same,
24:37
published stuff that we had.
24:39
I said, well, you forgot that
24:41
this partner made a new partner
24:43
last year and transferred
24:44
$750,000 of their volume to a new partner.
24:49
I said, and this is the problem when you get bigger,
24:52
you don't know what every single partner is doing,
24:54
and you start comparing each other.
24:57
That is our old process.
24:59
Our new process is,
25:01
the comp committee is made up of three people,
25:06
one member from the board,
25:08
one member not on the board, and me.
25:17
Gary Thomson, actually,
25:19
I did consult with him. He helped me.
25:21
We put together these
25:22
are the things that we're going to measure,
25:24
and we went to a base comp and a bonus pool,
25:27
which we didn't necessarily have before.
25:30
We completely changed
25:32
just our structure of partner comp.
25:37
There's still some formulas in there, but it's not.
25:42
I meet three times a year with the partners to go
25:45
over their expectations of what they're going to do,
25:49
where is their highest and best use.
25:52
If they are in a governance role,
25:54
if they're on a board of directors,
25:56
member of the board or if they're on
25:58
the ops committee or if they're an industry leader,
26:00
they're going to have very specific goals
26:02
around those areas that they
26:05
have leadership in addition to the other areas.
26:09
If they are not in an area of leadership or governance,
26:14
then they're going to have different goals.
26:16
Every partner has a partner accountability plan
26:19
and it's very focused on them.
26:21
Everybody is different.
26:22
There's not a single one that looks identical,
26:25
because every partner is trying to do different things.
26:28
Erin Hartman: Has this been in place since
26:29
last November as well?
26:31
Suzanne Forbes: This is our first year, so I haven't
26:33
actually completed a cycle yet.
26:35
Talk to me in a year, or talk to me in
26:38
January when we do the bonuses.
26:41
But it is we have tried
26:45
to put as much transparency in it.
26:48
We have said, the bonus pool is the bonus pool.
26:51
There's no guarantee.
26:53
We're doing a three-year transition on this plan.
26:57
I said, you may do great this year,
27:00
but if somebody else does awesome,
27:02
or you may do average,
27:04
but nobody else does better.
27:05
That bonus pool is going to get shared among all of us.
27:09
It's going to be interesting.
27:12
I think the change in
27:13
governance is important to it because I've got
27:15
people focused on what's their highest and best use.
27:19
Erin Hartman: What pushback have you
27:21
gotten about changing the comp model?
27:25
Because I feel like people just change.
27:27
Even if it ends up being positive for everybody,
27:30
change can be so hard.
27:32
Suzanne Forbes: Yeah, it is. It was definitely a lot of
27:36
uncertainty when you start messing with people's comp.
27:39
Quite honestly,
27:40
what we did this year was we based 90% of their comp
27:43
on their prior year and 10% of the bonus pool,
27:45
and then we're going to drop base by 10% a year,
27:49
so that in three years it's a 70/30.
27:51
It's good and bad.
27:53
It's good because it normalizes things.
27:55
It makes it like you're not going to see
27:57
this huge drop in your comp,
27:59
but you're not going to see this huge increase.
28:01
If you have a really, really good year,
28:04
it could work against you because
28:06
under maybe prior circumstances,
28:08
you might see this huge increase in comp.
28:10
Well, I've only got a 10% bonus pool.
28:13
I just told the partners,
28:15
we just have to do better, and we have to have
28:17
bonus pool 20% so I could really reward it.
28:19
At that, if we do well and
28:21
we get accomplish what we want to get accomplished,
28:24
then we should have that bonus pool.
28:26
It's a little bit of the end,
28:29
right now, we only have a 10% bonus pool,
28:32
but we could have a 20
28:33
because what we said is that we keep the base the same
28:35
and any additional cash
28:38
available would only go to the bonus pool.
28:40
Erin Hartman: You can't be everything on both sides of it,
28:43
but yeah, to make it a little more stable.
28:45
Suzanne Forbes: They have some stability in there,
28:47
but you also have some incentives in there.
28:49
Erin Hartman: I know all of
28:51
this has been less than a year,
28:52
but how would you say that it's
28:54
affected your firm culture
28:56
and morale and even relationships
28:59
with your partners and between partners?
29:01
Suzanne Forbes: It definitely changes the employees.
29:05
When I rolled it out to employees,
29:06
I explained the why,
29:07
why are we changing and what's going to impact them.
29:16
I think the partners right now,
29:19
the ones that are in the governance and the ops board,
29:22
they are like, wow, this is a lot of work.
29:24
Then trying to understand,
29:27
I think probably will still have
29:29
just clarity around culture.
29:33
We changed them from partners in charge
29:35
picks to office managing partners.
29:38
Actually, office managing
29:40
persons because they don't have to be a partner.
29:43
We actually have one that's not a partner
29:45
that's in charge of the office,
29:46
and it's culture and community,
29:48
and so we're still trying to understand define culture.
29:52
If you've got an employee that shows up to
29:55
work late every day and is negative to the culture,
29:58
who's in charge of that?
30:00
Those are things we're working out.
30:03
But I think bringing
30:06
clarity around roles and responsibility was good.
30:09
I think that's helpful for the culture and
30:13
the morale and people understanding who to go to.
30:17
Erin Hartman: That's interesting, like having
30:19
that conversation with the staff,
30:20
those that aren't partners.
30:22
Did they have a lot of feedback or
30:24
concerns or good advice?
30:28
Suzanne Forbes: Most of them were just wanting to
30:29
know how it impact them,
30:31
what were they going to see.
30:33
But also change is hard.
30:36
We talked a little bit about change,
30:37
and there's so much change going on.
30:39
But I always quote Jack Walsh and he said,
30:42
"If the change outside the organization is greater
30:45
than the change inside the organization,
30:47
the end is near."
30:48
I talk about Blockbuster.
30:49
There's a perfect example. I talk about this.
30:52
Every Town Hall we have,
30:54
we talk about the change curve and the why.
30:57
I try to assure people this
31:01
should actually even as hard as change is,
31:03
the fact that we are willing to change and be adaptable
31:07
should give you comfort
31:09
that we're not going to sit here and just say, well,
31:12
this is the way we've always done,
31:13
and then we have to continue to do it this
31:15
way because that's not
31:17
going to keep this firm around
31:18
for another 60 plus years.
31:21
Erin Hartman: Are there positives that have come
31:23
out of it more so for your newer professionals
31:28
that aren't partners yet,
31:29
just as far as career development?
31:31
You mentioned the one person that
31:33
wasn't a partner that was in charge of a unit,
31:35
those types of things or
31:37
changes in their career progression.
31:40
Suzanne Forbes: I think so. We do a lot of changes.
31:45
We implemented a developmental coaching program
31:47
and which really has improved our communications
31:52
around advancement and expectations
31:55
and we've gotten really positive feedback
31:58
on that, monthly check-ins.
32:01
One of the things that was
32:02
a unintended consequence but in
32:05
a good way was as we know in public accounting,
32:07
sometimes, you don't necessarily know who's your boss.
32:11
Who do you report to?
32:12
Do you report to the manager on the job?
32:13
Do you report to the office person?
32:17
Do you report to your best friend?
32:18
Who do you report to?
32:21
This concept of having one boss,
32:24
ultimately and it's actually
32:26
that's been really beneficial because
32:28
we have now clear this developmental coaching program
32:32
where we revamped our program for helping people
32:36
advance through their careers and
32:40
now our developmental coaches report to
32:43
the service line leader or the business unit leader.
32:47
There's been some unintended consequences
32:50
for clarity as we have worked from top down on
32:54
governance and who's making decisions and why.
32:57
Probably one of the big areas is budget,
33:00
who has authority to spend.
33:02
That's been really interesting
33:05
because we're getting ready go in our next budget cycle,
33:08
one things we're going to do is go line item down
33:11
the financials and stuff and say
33:13
and we changed our financial statement reporting
33:15
to be service line and industry focused,
33:18
not office, there's no office financials.
33:21
There's a small office financial that has
33:24
just things that are
33:26
just related to culture and community.
33:27
Local culture, local community.
33:29
Erin Hartman: How do you track this?
33:30
Do you have ways to monitor this
33:33
and make sure that people aren't doing
33:36
the old things and they're doing the new things?
33:38
Suzanne Forbes: It's not easy. It's gotten a lot better.
33:41
In the beginning, it's just letting people know,
33:43
it's just old habits.
33:45
it's really just old habits.
33:46
Just say, hey, don't forget in the future, so and so.
33:50
Even it was the other way too,
33:51
hey, service line leader,
33:53
if you're going to hire somebody,
33:54
would you let the OMP know that they got
33:57
a new employee coming in their office
33:58
and maybe talk to them a little bit,
34:00
maybe even have them interview them so that
34:02
they meet the team they're going to
34:04
be working on a more daily interactions, at least.
34:08
We had to go both ways.
34:11
Well, I think, you have to,
34:14
you got to remind people, again,
34:16
we've been doing stuff like this for as long
34:19
as I've been with the firm and then we change it.
34:22
Once in a while you come back into that,
34:25
you fall back into an old habit.
34:30
We use Power BI, we have all our reports and
34:34
transparency and it's very hard.
34:38
There still is an office code,
34:40
but we don't really look at it that way.
34:43
We look at it by industry and by service line.
34:46
Erin Hartman: I know you also have a remote office.
34:49
You were talking about how those remote employees were
34:53
part of various offices but you
34:55
wanted to make them their own office.
34:57
Can you talk about that in that journey?
34:59
Suzanne Forbes: That journey is in process,
35:01
a remote office plan and really being
35:05
able to have those people have their own,
35:09
we call it a remote culture champion,
35:12
a remote culture liaison and
35:16
really trying to make them feel they have
35:20
different needs and so what
35:22
I've come down to is we try to focus so hard on
35:25
making the remote culture feel identical to the in
35:28
office culture and that
35:30
just doesn't happen, it's just different.
35:32
A different, good, it's not bad and different,
35:36
it's just different and
35:38
we need to embrace that difference
35:40
and serve and really help
35:42
those people as to where they want to be.
35:45
Erin Hartman: But so there are like
35:46
metrics or their financial information,
35:49
that's still part of the individual service lines?
35:53
I know you're talking about no more offices
35:55
and here I hear [inaudible].
35:57
Suzanne Forbes: I don't care if they're remote or not.
35:59
We do not look at it that way.
36:01
Now, I will tell you sometimes we do
36:04
look at remote for obviously employee engagement,
36:08
or turnover, or satisfaction, or productivity.
36:13
But we also look at people in
36:14
the office or we have three roles.
36:17
You can be in office, you could be flex,
36:19
which means generally you live
36:20
within two hours of an office,
36:22
but you're engaged in that local office culture
36:25
and you come in maybe a couple of days
36:26
a week or as needed,
36:28
you're not remote, so remote
36:30
more than two hours away from the office.
36:32
Flex is, you may come in the office
36:35
one or two days a week or more or less,
36:39
but in office is that you come in four or more days.
36:42
Maybe you work in the office
36:44
four days and you really get to choose
36:46
which of those positions you're looking for.
36:51
There's no talk at all about,
36:54
we either get rid of remote,
36:55
or hybrid, or anything like that.
36:57
I feel like it works great.
36:59
I feel like when you have people from
37:01
all different skills and backgrounds and services
37:05
across the country there's absolutely no reason
37:08
why we can't continue to
37:10
have a very valuable and effective
37:14
and productive and enjoyable remote workforce.
37:17
They're awesome. We're probably going to make
37:20
our first remote partner here in
37:21
the next one or two years.
37:23
Erin Hartman: Interesting.
37:24
Because we do hear a lot about that,
37:28
remote works, but how do we actually
37:30
make this person a partner?
37:32
Suzanne Forbes: We got a long-term employee
37:35
and she's being held to
37:37
the same standards that are in an office employees.
37:40
But if you have a national practice or you have a niche,
37:44
really the biggest thing is that
37:45
this is a balance piece,
37:46
but you can develop that.
37:50
We don't do business development by
37:53
geography anymore like we used to.
37:54
It's not chicken dinners at the local, whatever.
37:57
It's very industry focused,
37:59
it's got leadership,
38:00
it's driven, it's a whole strategic plan around that.
38:05
You're doing, we want to still
38:07
be good community citizens.
38:09
We still want to get back to our
38:10
communities and ways and that's
38:12
the local community and culture piece of it.
38:16
I think you can definitely do that.
38:19
They're not measured.
38:20
Our remote folks aren't measured differently.
38:22
It's still service line or industry.
38:25
What industry are they in?
38:26
What service line do they serve?
38:29
Those are the ways that we
38:31
measure our expectations and
38:35
they have developmental coaches,
38:36
some of them are developmental coaches.
38:39
We do have certain number of,
38:41
we have a JM Con.
38:45
We're calling it JM Convention
38:47
in November and pretty much,
38:49
we expect even if you're a remote employee that you will
38:52
attend unless you have a reason not to attend.
38:55
I don't think it's unreasonable to ask a remote employee
38:58
to come to an office firm wide event
39:01
once or twice a year.
39:02
They usually come for that and
39:03
potentially one other time unless they have reasons to
39:07
travel for clients and depending on what they're
39:10
doing because I think
39:11
the connectivity is still important.
39:14
That's an important part of it.
39:16
Erin Hartman: For sure. You mentioned
39:18
your champion over your remote office.
39:21
But their role would be to really focus on
39:24
the culture that your remote employees are experiencing.
39:29
Suzanne Forbes: We do things like
39:30
remote happy hours and stuff,
39:32
or there's always the issue,
39:35
you have an April 15th tax season party
39:37
for your people in the office.
39:39
What do we do for our remote folks?
39:41
They've done things like,
39:44
we played Jeopardy not long ago,
39:46
we've done a Kentucky Derby online.
39:51
You got to find out is that what they want,
39:54
or do they want to spend time just
39:57
talking about what they like to do in their free time?
40:01
Sometimes, it's the water cooler,
40:05
the coffee pot chat that you
40:07
miss and how do you bring that make them,
40:09
how is it always just all about business all the time?
40:12
The only time they're talking to somebody is
40:14
when you need something done or to go over
40:16
some client and trying
40:20
to figure out so that's what I want with culture.
40:22
Really, to be able to have that,
40:24
to make them know that they're important,
40:28
that they get the same developmental
40:30
coaching process as everybody.
40:32
But really, what is
40:33
it that they want out of their career?
40:36
We have found not all of them want to do happy hours.
40:39
[OVERLAPPING] There's people in the office
40:40
that don't want to do happy hours.
40:42
Erin Hartman: But some of them do it.
40:42
Some of them it means everything.
40:43
Suzanne Forbes: Exactly. What makes us
40:45
unique is our differences and
40:46
we need to not expect everybody to be identical.
40:50
Erin Hartman: We have a tool about
40:51
motivating employees and you
40:53
can easily think it's just compensation, but it's not.
40:56
You also easily think the same thing that
40:58
motivates you motivates other people
41:00
but that's not true.
41:02
I just had somebody from our firm telling me
41:04
the other day they had an employee who was leaving.
41:07
It was a newer employee and she said that they took some
41:10
of her benefits away and she said, what benefits?
41:14
She's thinking her health insurance
41:16
or 401(k) and she said,
41:17
we used to have happy hours and we don't anymore.
41:20
She said, you thought that was a benefit?
41:22
I don't even want to figure those,
41:23
[LAUGHTER] but those were a benefit to her.
41:26
Really understanding your employees
41:29
and what is important to them is huge.
41:32
I do think that matters when you are remote to
41:35
have someone focusing on
41:37
the culture that you're experiencing too,
41:39
so I think that's great that you're doing that.
41:41
Well, Suzanne, I really appreciate you
41:43
joining us and sharing with us.
41:45
Sounds like you have a lot going on.
41:47
What are you most excited
41:49
about for the next two or three years?
41:51
Because I can tell you have a lot of
41:52
energy and a lot going on,
41:54
but I'd love to hear your thoughts
41:55
on just your firm and the profession.
41:57
Suzanne Forbes: I'm very interested to see
42:02
how the change in ownership in
42:05
the profession with the private equity
42:07
coming in with these huge mega mergers,
42:10
with the remaining independent,
42:12
I'm very interested to see
42:14
how that's going to impact the profession.
42:17
I'm also excited about the technology changes
42:21
around AI, automation, analytics
42:25
and how we can serve our clients better.
42:28
I think we have got to really think about how do we
42:34
be more relevant to
42:37
our clients in this day and age of technology.
42:41
I love to watch the Super Bowl commercials
42:43
and it's like, you watch TurboTax
42:45
or whoever is out there like,
42:46
you just upload everything.
42:48
Of course, that's not our client base.
42:50
A lot of times I'll have conversations
42:51
with clients because a lot of times
42:53
our conversations are around
42:54
judgment and they just need a sounding board.
42:57
When you're dealing with CEOs
42:58
of companies and high level people
43:01
and the audits important
43:03
and the tax return is important,
43:04
or whatever the financials that we're doing.
43:07
But what they really are looking for is just like,
43:10
I'm looking for sometimes a sounding board.
43:12
They want our opinion and they want to know.
43:15
I think that's something that I'm excited to
43:19
see how our profession and how,
43:22
I know our firm is very
43:24
advisory focused where we're hiring people
43:26
that are industry specific people
43:29
to come in and work so that we can
43:30
bring more expertise to
43:31
our clients and have those conversations.
43:34
I think with the verge of technology in my mind,
43:38
being able to remove some of what I would call
43:41
the more routine tasks and freeing us up
43:45
to be more advisory and consultative and
43:48
a more important business partner to
43:51
our clients really excites
43:53
me for the profession and for our firm.
43:56
It's not going to be easy to get there.
43:59
It's going to take a lot of change,
44:01
which, like I said,
44:03
we all just love.
44:04
But I think those are the things that
44:06
we've got to really key into
44:08
and I'm excited about it and
44:11
I got partners that are excited about it.
44:13
I got some partners like,
44:14
oh gosh, it's going to be a heavy lift.
44:16
I'm like, yeah, it's a heavy lift,
44:17
but that's what we're doing.
44:21
I think just to go in,
44:24
even what we do from our governance structure change,
44:28
but to go help a client do that,
44:30
to understand that they need to
44:32
be looking at what's going on in their industry
44:35
and what does it look like and how are they
44:37
running their firm or their company
44:39
and they were a small company and
44:40
what infrastructure do they have in place?
44:43
What is their next generation look like?
44:45
Having all those same conversations
44:48
that we have as owners of
44:50
our firm that we can translate to
44:52
our clients and teach our younger folks,
44:55
our people that don't have the years of experience,
44:57
also, have them listen to it and shadow us and be at
45:02
the table with clients to learn
45:04
all these things that we have
45:06
learned over our experience.
45:07
I think those are areas that are
45:10
exciting to the profession and made to our firm.
45:14
Erin Hartman: I love that. I think that is huge.
45:16
I'm glad you touched on that,
45:17
getting your newer people used to that as well
45:19
and being advisors. Because I do.
45:22
I think that's what is
45:23
the exciting thing about the future of the profession.
45:26
It's not the compliance,
45:28
it's the advising and the true value
45:30
that we can add to our clients.
45:33
Suzanne Forbes: We really have to figure out
45:34
how to make that happen.
45:37
Our firm, one of our goals is,
45:40
is that 100% of our clients because of course,
45:43
I'm aspirational,
45:44
have advisory component to their service.
45:47
What does that look like?
45:48
How do you make sure you can deliver that?
45:50
How do you train people and
45:52
develop them to do this advice,
45:54
look beyond the numbers,
45:56
look beyond the tax return or look beyond
45:58
the financials or making sure?
46:01
We do a lot of work with nonprofits
46:02
and we're spending a lot of time at nonprofits
46:04
about their funding sources and
46:06
their matches and obviously,
46:08
all the scrutiny that comes around nonprofits.
46:11
Even with governments we all know
46:13
that's operational audits and efficiency
46:18
and all those things that are so
46:20
focused right now and what does that mean for a client.
46:25
Not only that, our clients,
46:28
they can't find good accountants and everyone.
46:31
The cast practice and how that's
46:33
growing and what does that mean?
46:36
It's not only producing in the financial records,
46:39
but it's the internal control,
46:40
it's the peace of mind,
46:41
it's the fact that they got
46:43
somebody there that it's not one person.
46:45
It's our job, if somebody leaves,
46:47
we train them because they're internal.
46:49
Really for them to understand
46:51
the benefits of having somebody taking care so
46:56
they can go take care of their business
46:57
and they're not trying to worry about making
46:59
sure payroll is getting paid
47:00
or the bills are getting paid or
47:01
helping them with cash flow
47:03
or budgeting and all those things.
47:05
Those are the areas that I think we
47:08
can really make a difference to our clients.
47:11
Erin Hartman: Well, we can have a whole other podcast,
47:13
because I do.
47:14
I love this topic
47:15
and just talking about service offerings,
47:17
because they are what's going to
47:19
change the profession from
47:20
being totally deadline and compliance driven.
47:24
When we just start talking about
47:26
work life balance and how the profession can't
47:28
continue to be working people so much
47:32
during busy season,
47:33
a lot of it, all of it really gets back
47:35
to what value are we offering our clients?
47:38
Thank you so much for being here with us today
47:41
and sharing so much about what you guys are doing.
47:44
Suzanne Forbes: Gladly, I enjoyed it.
47:46
Erin Hartman: Thank you for tuning in to
47:47
Transforming Tales of Business Evolution.
47:50
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47:53
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47:55
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48:13
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48:15
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