How one firm used core competencies and The CPA Center of Excellence to transform its future

Picture this:

You have a local CPA firm and all of the partners are within 10 years of retirement. There are some young, talented CPAs on staff, but they feel disconnected from the firm’s management. All of the firm’s employees, even the partners, need to fine tune some vital skills — particularly the profession’s core competencies — that are critical for the profession and business trends. Your clients have new and emerging needs.

 

How will you reshape and reinvent your firm in order to find new ways to deliver value?

If that sounds familiar, it’s because that describes the situation at CPA firms across America. As a result of demographics shifts, many firms are facing mass retirements of Baby Boomers over a relatively short time period.

Historically, many firms have left the decision and policy making to the partners or owners. While that philosophy was accepted for years, it is especially disconcerting for those considering advancement. And as a result of today’s ever-changing business climate, technical accounting skills are not enough. It’s the non-technical, career skills that can make a difference and set you apart from the competition.

Kruggel Lawton CPA, a northern Indiana firm with offices in South Bend and Elkhart, was one of these firms facing the situation above. But Kruggel Lawton was different from most of the rest in that it realized it could not continue on this path and be successful in the future. Past efforts to resolve some issues had not worked. This time, the firm turned to the CPA Center of Excellence® for a solution.

The Background

Kruggel Lawton has been a successful firm for nearly 60 years. It currently has eight partners and total staff of more than 50. Facing many challenges related to succession planning, management processes and staff development, the firm knew it was time to take action before it became ineffective at best or cease to exist at worst. Talented young staff had started to and would continue to become disinterested or disengaged and move on to other opportunities rather than waiting for Kruggel Lawton to reinvent itself.

Manager: “The process was rewarding. It’s helped us become more efficient and make better decisions. It was worth it.”

With the firm at a critical juncture, its future was at stake in early 2013. The CPA Center of Excellence®’s advisory services, led by David Griffiths, Ph.D., are designed to take a CPA firm on a year-long journey to transform its culture, human resources methods, and hierarchy structure to position itself to overcome future obstacles.

Offering Solutions

The firm’s work through the CPA Center of Excellence® began in July 2013. The firm called it the KLarity Project (the K and L represents Kruggel Lawton). The goal was to clarify the firm’s business processes — everything from its mission and vision to its values and standards. The advisory services are designed to break down all of these barriers and rebuild them through a series of challenging but worthwhile exercises and assignments. All staff is held accountable by the advisors for their personal responsibilities as they move through the 12-month process. By way of healthy conversation and disagreement, a new firm business model emerges that satisfies the issues such as succession planning, competency development and group decision making.

The process was put into action by forming a cross-staff level and cross-functional group called the Frontier Team. The team met at various times throughout the year and communicated via a private online community. Through their diverse perspectives and experiences, the team was able to come to a consensus on various issues and develop a plan to follow in the future.

Partner: “I don’t have all the answers and I need to listen to others. Empowering others will make us better and make our firm stronger.”

The advisors kept the team focused and on-task even in the midst of ongoing individual staff and firm-wide client work.

When the project concluded in the summer of 2014, Kruggel Lawton was much better off than it had been just one year prior. It had completely re-invented and re-positioned itself for all of its internal management and external business dealings. The firm is now prepared to grow and handle a variety of situations in a streamlined, effective manner without losing sight of its history and success since 1956. The entire firm, from partner level to staff level, was energized and enthusiastic about the “new Kruggel Lawton” as this journey (the process) ended but the next journey (the implementation) was about to begin.

Among the results of the process was the specific guidance for career advancement in terms of competencies involved at each level in the firm, as well as a new employee handbook that brings all of the firm’s policies together in a digital format that is easily accessible and easy to follow.

Reflecting on the Process

The team concept of the advisory services process accomplished buy-in of the transformation throughout the firm. All employees are now more motivated and happier because of the new direction. All voices have been heard and everyone was encouraged to become better and more active listeners. A safe-to-fail environment was established to encourage creativity and new ideas, but with the understanding that if the efforts fail it’s not the end of the world and you can move on to the next idea.

Two outcomes were the most important:

  • Both the clarification of and agreement with the firm’s values has enabled continuity and mutual understanding within the firm as well as a sense of accomplishment.
  • The process for setting goals was redefined so that goals are now achievable based on analysis and past results as opposed to arbitrary goals that were based on assumptions rather than fact.

The firm has already begun the core competency development process by enrolling its employees in the CPA Center of Excellence®’s online interactive course modules. The pathway has been paved thanks to the dedication and contributions of the firm’s talented staff.

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 Award-winning methods

Read the Chartered Management Institute's 2016 Management Article of the Year on this project, written by CPA Center of Excellence® Advisor and talent management expert David Griffiths, Ph.D. The thinking behind the methods used with Kruggel Lawton won top honors for Griffiths from CMI, the leading management association in the United Kingdom.