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john fenton, cpa, mba is the ceo of john j. fenton executive coaching, which he launched following a successful 30+ year career as a managing partner and cpa. he is a certified success principles™ trainer, an award-winning speaker, best-selling author and leading authority in leadership. |
cue purpose, vision and culture as you pursue excellence.
by john fenton
the holistic guide to wealth management
some call it a battle, some call it a war. whatever you call it, there’s no arguing that competition for talent in our industry is fierce. accounting firms, like most other businesses, are struggling to find qualified workers to meet the growing needs of their clients and customers. at the same time, opportunities to grow revenue are abundant.
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according to mckinsey data, voluntary “quit rates” are 25 percent higher than they were before the pandemic. at some firms, attrition rates have been as high as 20 percent to 25 percent. meanwhile, a recent gallup survey found that only one-third of employees (32%) felt “engaged” in their jobs. meanwhile, mid-level professionals who would normally be on track for long careers at their employer are leaving in droves to pursue something else.
the aforementioned mckinsey report identified the motivating factors that keep people in their jobs and the demotivating factors that drive them away.
according to mckinsey, the top drivers of employee retention were:
- meaningfulness of work
- flexibility
- adequate support for well-being
according to mckinsey, the top five reasons that employees quit their jobs were:
- lack of career development and advancement opportunities
- inadequate compensation
- uncaring and uninspiring leaders
- lack of meaningful work
- unsustainable work expectations
further, accounting today’s “the year ahead: 2023 in accounting” survey noted that recruiting and retaining good employees was now the no.1 challenge for accounting firms. i don’t expect this to be just a 2023 problem, do you? you know how difficult it is to find and retain good employees, and you worry about this daily.
a new way to think about attracting and retaining talent
but what if we were thinking about attracting and retaining employees all wrong? one thing is certain. we are living in an age of disruption. the pace of change is unprecedented. there’s no going back to the way things were before. organizations that learn to lean into uncertainty and ambiguity, rather than fight against it, will most likely be the big winners. flexibility, adaptability, diversity and agility, among others, are qualities that will enable success.
kyle walters, a dallas-based wealth manager who has acquired several accounting firms, calls it becoming an anti-fragile cpa, based on nassim taleb’s landmark book, “anti-fragile: things that gain from disorder.”
in his book, “excellence now: extreme humanism,” tom peters wrote that things that were once hard, such as numbers, strategic plans and organizational charts, etc. are now “soft.” peters also argued that things once considered soft (people, relationships, culture, etc.) are now hard. what was once deemed most critical – the numbers, strategic plans, org charts – are subject to change and manipulation. things we used to call “soft skills or ”people skills” are now hard, asserted peters, adding that those things are hard because they are bedrock essentials for a thriving business. as one of my clients recently said to me, “peopling is hard!” yes, it is! but i believe it’s worth the effort to master it.
now let’s look at purpose and vision and why these two concepts are foundationally important.
purpose
you may recall simon sinek’s famous tedx talk or read his book, “start with why, how great leaders inspire everyone to take action.” as sinek said, “people don’t buy what you do, they buy why you do it.”
the same thing that inspires your customers and clients to hire your company or firm is what inspires your employees to join your firm and stay there. they believe what you believe. and because your employees want to belong to something bigger than themselves, they are inspired to work for organizations that are clear about their why.
real world example
while helping a client create their strategic vision and gain clarity about their positioning in their marketplace, i encouraged them to understand the importance of knowing their why. i could see the light bulbs going off in their heads. we brainstormed about their value proposition. once clarified, they used that value proposition as the focal point for their branding:
“we protect what’s important to our clients by guiding them with clarity and purpose through life’s biggest moments.”
there are purpose-driven organizations that take the idea of purpose to an even higher level. companies like patagonia, zappos, interface and others seek to change the world and they make their core purpose the central theme for everything they do.
for years patagonia founder yvon chouinard made it clear that the company’s overarching purpose was to save the earth from the climate crisis. in a bold move, chouinard transferred ownership of the company he founded 50 years ago to the patagonia purpose trust (not to family members) to protect its purpose and values. for more, see chouinard’s open letter on the company website: “earth is now our only shareholder.”
i once served as managing partner of the atlanta office of one of the world’s largest accounting and consulting firms. one of our top clients, interface (a leader in the carpet industry), was led by founder ray anderson, who declared that his company would be carbon-neutral by 2020. interface is now a certified third-party carbon-neutral enterprise.
your firm’s purpose doesn’t have to be as ambitious as saving the world, but you should be extremely clear about your why and what your company truly believes in.
next, your actions – your what – pertain to everything you do and say that reinforces your beliefs.
before we get to your actions, however, there’s a very important step you must take. first you must determine where you are headed as an organization, and then you must create a road map to get you from where you are now to where you want to be. that takes vision.
vision
your vision and your purpose should be aligned. once you have extreme clarity of your purpose, you need to decide where you want to take the firm. think of your vision as a target to hit with your purpose – the bullseye – at the center of the target.
what’s the future of your firm? it’s important for everyone at your organization to be clear about the future you have in mind for your firm because your people want to know where they are headed and whether that destination is aligned with their sense of purpose.
you may already have a general sense of your firm’s vision, but does everyone agree on what that vision is? if you asked your colleagues what your company’s vision is, would everyone have a similar answer? creating the vision for your business works best when it’s a collaborative process. if it’s not collaborative, and it’s just your own vision in an echo chamber of close supporters, well, good luck getting buy-in from your entire team.
when formulated properly, your vision takes into account your culture and your organization’s history, as well as the internal and external environment (economic, political, market, industry, etc.) and its ideal future. crafting your organization’s vision is more than just a strategic plan. and once you have crafted your vision, you’re not done yet. it’s an ongoing process that evolves as your firm evolves. the real work involves developing actionable plans (key bold initiatives) that will help make your vision a reality.
the strategic vision process
this process is designed to be a collaborative effort to gain consensus on the organization’s future direction. it is a brainstorming process that is visual in nature and that yields results and a final outcome including (a) a vision statement, (b) three to five bold initiatives, and (c) action plans that will move the company toward achieving the overarching vision destination.
the process is broken down into five major components:
- historical context
- the current environment outside of the firm
- internal strengths, weaknesses, opportunities and threats
- vision destination
- bold initiatives and action plans
a few years ago, one of my clients clearly needed a new sense of direction and brought in a new leader. in my pre-planning sessions with the firm, it became apparent that the firm had underlying trust issues amplified by less-than-effective communication.
in response, we created a collaborative strategic visioning process in which partners took stock of where they felt the firm had been. then they embraced the current reality and looked toward the future. additionally, the process was designed to build trust among the partners as they worked together to create the vision.
a few months later, however, i received a disturbing phone call from the firm’s ceo: “john,” she told me anxiously. “i’m afraid our strategic vision is at risk. the trust issue is coming to a head at the board level and i’m not sure what to do. can you help us?”
so, the ceo and i met with board members and introduced a process to improve communication and work through some past conflicts. about a month later, she called me excitedly: “john. something magical is happening! the board members and the other partners are having open, honest, direct conversations with each other. more importantly, everyone is playing on the same team.”
since then, everyone on the leadership team has contributed to the vision and has participated in the bold initiatives that moved the firm one year closer to its overarching vision. first, the partners established rules – their operating agreements – about how they would interact with each other during meetings and in one-on-one conversations. then, each partner chose one or two bold initiatives with which to get involved and met regularly to track progress toward the goals for each initiative. additionally, the leadership team strengthened the levels of trust by living up to their commitments with each other, by improving their internal communications, by having open and honest conversations and by engaging in deep listening.
the results have been impressive. the depth of clarity and engagement improved significantly. attrition rates continued to decline and outperformed the market, revenue increased and productivity improved. and in 2022, the firm was recognized as one of the accounting industry’s best places to work (accounting today), and best of accounting client satisfaction (clearlyrated).
next, we will explore culture – the glue that holds it all together.
culture: it’s something you do, not something you are
according to management guru tom peters, getting an organization’s culture right is the “bedrock” of a thriving, sustainable business. interestingly, a deloitte report found that in 2016 only one in eight companies (12%) believed they understood their work culture. fortunately those numbers seem to have improved greatly since the pandemic as five out of six organizations (83%) now want to build more people-centric cultures, according to a linkedin learning 2023 workplace learning report.
but why is culture so difficult to understand and why is it so hard for organizations to get it right?
i’ve found that culture is not about the nice aspirational sayings you have on your office wall or building lobby. culture is a verb, not a noun. as daniel coyle explained in the culture code: “culture is a set of living relationships working toward a shared goal. it’s not something you are. it’s something you do.” coyle also called culture a “never-ending process of trying, failing, reflecting and above all, learning.”
from where i sit, you and your employees are the physical embodiment of your culture. you are the brand. your behaviors and actions define what you and your team believe. as the leader of your organization, culture begins and ends with you. further, your customers and clients assign value to your firm and your brand based on what they observe about the way your team interacts with them – and with each other. and the same is true within your firm. everyone is watching for clues about what’s acceptable behavior and what is not.
culture is values-based. it reflects what you and your employees value most. it reflects what you believe. here are some examples of culture statements from my clients:
- “invest in relationships – get to know your co-workers and your clients by talking more and emailing less.”
- “assume positive intent – suspend judgment and use active listening to resolve issues.”
- “ speak honestly and directly.”
through observable actions, everyone can see what those values are. you can set the bar high for your culture by focusing on what matters most and making it clear and simple. one of the easiest ways to do this is to acknowledge someone in the organization whose actions exemplify one or more of the organization’s core values. tom peters wrote that acknowledgment is “the most powerful tool in the leader’s kit.” conversely, you can set the bar lower by letting slide those behaviors that are not in sync with the company’s values.
your culture is the glue that holds it all together. achieving clarity on what defines your culture, and reinforcing the culture through consistent and frequent communication, is the foundation for taking your organization to new heights. just remember to communicate, communicate, communicate. people forget, so you have to remind them constantly.
we’ll finish with your role as a leader in executing the ideas i’ve put forth, including some ways to measure success.
leadership excellence
i have been a student of leadership for many years. a significant part of my thinking about leadership was forged from years of competing in sports at a high level and from being a part of successful businesses. i played on both championship teams and mediocre teams. what was the difference between them?
the championship teams were those with great leaders who inspired a clear vision of the future. they had a clear purpose for everything they wanted us to do and made sure the team’s culture and expectations were easily identifiable and consistent.
getting the small things right mattered, and trust was earned every day. of course, having the right talent in the right place at the right time was crucial to the team’s success. for one team i was on, everyone was accountable to each other, and the coaches consistently applied discipline to everything we did. our head coach, the legendary howard schnellenberger, instilled in us the discipline to practice (and play) like professionals every single day. from my experience, achieving excellence requires this unequivocal approach to discipline.
in five short years, our team went from a mediocre .500 winning percentage to a national championship. on the wall of the locker room was a simple statement: “the goal is a bowl. then to win the national championship.” vision, purpose, discipline, accountability and talent.
to attract and retain the kind of employees that you need, you must be committed to making your organization world-class. much of what i have shared so far are ideas for you to consider as you think about having a world-class organization. why world-class?
great teams and great leaders desire to be part of world-class organizations. they consistently pursue excellence in everything they do. they encourage everyone at their organization to pursue excellence in their personal growth and to commit to making constant improvement.
after years of training in the martial art of tai chi, i’ve learned that achieving mastery is about more than just mimicking motions and postures. mastery requires focus, clarity, flexibility of mind and body, attention to detail, self-awareness and a mindset to achieve it. the same goes for high-performing organizations.
in his book, “good to great” author jim collins explains the hedgehog concept. it’s about knowing three key things:
1) what you are deeply passionate about
2) what you can be the best in the world at
3) what best drives your economic or resource engine
great companies find the sweet spot at the intersection of those three circles above and consistently refine that sweet spot. according to collins, transformations from good to great come about by a series of good decisions made consistently with a hedgehog concept, supremely well executed, accumulating one upon another, over a long period of time.
i have found that mastery of anything, including the pursuit of excellence, requires consistent attention to the small things and to the things that really matter. it also requires a mindset that’s steadfast on achieving greatness. simply, it’s a conscious choice to pursue greatness. and yet excellence and mastery are elusive. they are something to strive for and improve upon continually, and it is in the effort of this pursuit that real beauty lies.
final thoughts
the motivations i had as a young man entering the accounting profession are generally not what motivate most people today, especially young people. as a boomer, improving my financial status and position in society was a primary motivator. but today i am motivated by a sense of purpose. i believe we are very near an inflection point in which the intrinsic value of our work outweighs the extrinsic motivators of the past – compensation and status.
in his book “drive, the surprising truth about what motivates us,” author daniel pink argues that our economy is moving to more right-brained, conceptual work. increasingly he says our workforce will be made up of individuals who are driven to be self-directed, who are committed to getting better at things that matter (mastery), and who are connected to a sense of purpose.
i see signs of pink’s observations all around me. for instance, i’ll bet you are adding more and more people to your team who have strong critical thinking and creative problem-solving skills. your clients’ needs are more complex. they willingly pay your firm to help them solve complex problems. you need to attract and retain more critical thinkers and problem solvers so you can better serve your clients who face increasing amounts of complexity, ambiguity and rapid change in their businesses.
whether you realize it or not, you are in a relationship business
what better way to invest your firm’s time and resources than to build and strengthen relationships within your firm? russ porter, institute of management accountants vice president and cfo, told accounting today that a strong culture is essential to talent retention, noting that “people want organizations…who are willing to invest in their employees.” treat that investment as your top priority.
according to mckinsey quarterly, organizations can make jobs “sticky” by investing in ways to give employees more meaning, more belonging and stronger ties to their teams and other relationships. as some of you know, i’ve long been advocating for this, and i believe now is the time to make your organization “sticky.”
if you want to have a business that thrives in the 21st century, then you must commit to winning the battle for talent by creating an environment and culture in which everyone is challenged by meaningful work, and everyone feels they can contribute meaningfully to the organization because their purpose is aligned with the company’s purpose. and when that happens, everybody wins – you, your employees, your customers, your vendors and your community.
in the end, success can be measured by the quality of the relationships built. invest in having the best relationships inside and outside your firm. invest in your people. yes, this will take time, and i believe it’s well worth the effort. and you don’t need to wait to begin. as tom peters said, “excellence is the next five minutes.”
i’ll leave you with this final thought. many years ago, my mentor at the time shared with me several leadership attributes he thought were very important. they were six simple, but powerful words and i reflect upon them regularly: appreciation, compassion, forgiveness, humility, understanding and courage. practice them and apply them daily every chance you get.
it was some of the best advice i ever received.
now you can see how passionate i am about building the right culture at your firm. but some of you are still skeptical because culture seems hard to measure. actually, you can measure culture. start by looking at the renewed sense of energy, deeper levels of engagement, and improved communication throughout your firm. you can also use traditional quantitative metrics such as retention and attrition rates, revenue per partner, revenue per employee, profitability per client or engagement, as well as qualitative data from internal and external surveys.
conclusion
once you see the needle moving in the right direction in those areas above, i think you’ll find it worth the investment of time and resources to build (and keep tweaking) the right culture for your firm. and the right culture is one in which everyone is excited and energized to be a part of a world-class organization that provides significant value to its clients by helping them with their complete financial picture – not just their taxes and compliance matters.