Peter Drucker, the world-renowned management thinker and guru, famously stated that ‘culture eats strategy for breakfast’. This means, it does not matter how good your strategy is - if your firm’s culture is not effective it simply won’t happen.

In this last of eight articles, it is fitting that we finish on discussing the role of culture to make everything else happen. We have talked about strategy, the need to know where you are and where you want to go. We have talked about the technology available to help you run a more efficient firm and how process is critical in ensuring the technology works for you and your clients. We talked about the drive to deliver greater experiences for your clients and the services that millennial and GenZ clients will, and do, expect from us.

In article seven we talked about marketing and the need for firms to have a crystal-clear vision and a set of values that can be communicated effectively. These values and your firm's culture should be perfectly aligned in terms of your brand, your firm’s personality and the very way your firm and the people in it live and breathe every aspect of your operations. If you say one thing and do another it simply becomes confusing to your team and equally your clients. Similarly, multi-partner firms often suffer from a schizophrenic personality due to the collision of multiple personalities and an inability to agree on a single firm culture, brand and personality.

Why are people and culture so critical?

When we talked about marketing in article seven, I emphasised the shift in client expectations, and particularly buying habits of the millennial generation. Millennials and GenZ make up more than 60% of the workforce today with the oldest millennials approaching 40.

They are the entrepreneurs; they are the senior managers. Millennials make many buying decision based on values. The values of an organisation are more important to this generation than to others before them. The key point here is a buying decision may be one made by a prospective client but equally importantly it could be by a prospective employee and team member.

If we cannot articulate the firm values and culture, how can our prospective clients and team members make a decision about whether we are the right firm for them? When we focus on recruiting, research has proven that work-life balance, work flexibility and work environment often come out as more important for many millennials than pay. What could your firm offer to a prospective employee if you were asked today? Would yours be a more appealing proposition than your competitors down the road, also looking for good quality staff?

Of course, the key point here is that our people are our differentiator. It won’t be long before most firms offer a similar approach to technology to you being an established digital accounting firm. So where is the differentiator then? Our only true difference is the way our people engage and work with our clients. It’s therefore business critical we get this right if we are to survive and prosper in an increasingly digital world.

What is culture?

There are many definitions of culture but the one that stands out for me, and the one I always quote, is from Charles Handy, who simply defines culture as ‘the way we do things around here’.

It is the unwritten rules of an organisation. I often think about that tradition I have witnessed in most organisations I have worked in. When it’s your birthday YOU have to buy cakes for everyone. Surely if it’s your birthday your lovely colleagues should buy you cakes? This is a great example of culture at play. Nobody makes that rule, it is just the way it is and always has been!

Culture is hugely complex and deep rooted.

Culture =

• Values +
• Traditions +
• Beliefs +
• Interactions +
• Behaviours +
• Attitudes.

This combination of intertwined values, beliefs, traditions, demonstrate the challenges facing firms trying to change culture. Most firms have a culture that was not designed. Elements of it might be, but as teams grow, the increasing mix of values and beliefs collides with the more established elements such as behaviours and traditions. We have to take control of our culture and ensure we recruit team members who will fit our culture and help us shape and maintain the culture we design.

Changing just one of these six areas is a significant undertaking so appreciating that culture change requires all six to change really does show the size of the task and it is not something that ever happens overnight.

How to begin building a great culture

What steps can you take now to begin building a great culture designed for, and by, you and your team? What do you need to do to begin and ultimately bed in your culture of choice?

1. Have true clarity around your vision, mission, purpose and values.  If you have not got this yet, it’s the place to start and we talked about the importance of this in the last article around marketing. If you don’t know what your vision and values proposition is, no one else will.
2. It is critical that your team feels pride and ownership in your values, what do they want ‘their’ firm to be famous for? There is a real possibility that you will have team members that don’t fit your culture. The impact is here conflict and resistance to where you want to go. Remember culture eats strategy for breakfast!
3. Alignment – does every aspect of your firm reflect point 1? Everything your firms says, does, delivers, must align to your vision and values. For many years in my own firm we had an office environment that was mismatched to who we were as a firm and what we told the outside world. It meant nobody really knew who we were, just who we thought we wanted to be.
4. It is essential that we stop and think and look to create a work environment where our team are happy to spend almost half of their waking hours! What does this look like? Flexi-working, comfort, atmosphere? A happy, relaxed and productive workforce will keep your clients delighted and deliver the client experiences you strive for.

What happens when we get it right?

I touched upon it in point 4 above. When we get culture right, we deliver on our vision and aspirations. This occurs as we have a unique proposition in the people who deliver our services. Who would not want:

1. Great teams of engaged motivated loyal people focused on delivering your firm's vision
2. A team that is laser focused and capable of delivering true client experience
3. A clear firm personality leading to brand identity and competitive advantage
4. A steady flow of people wanting to come and work for your firm
5. Reduction in recruitment costs and greater retention of the first-class team you have built?

It’s quite compelling, isn’t it? It doesn’t happen by accident. It needs to be planned and considered and the little details matter most.

Challenges in creating great culture

We have touched on some of the challenges already. Culture is made up of a number of inter-dependent characteristics that in isolation are difficult to change. So, this is the first big challenge in changing culture.

It’s really hard!

Culture change won’t happen overnight, there will be some fallout; you may even lose some team members in the process. Having said this, culture is more important today than ever before. Our consumers, in terms of clients and staff, really care about it. It is simply something that we cannot leave to chance and we need to take ownership over the design of the business we want to be.

Besides being hard, the other big issue we have to contend with is…

We have always done it that way!

This is NOT a reason to not change. Just because we have always done it that way it does not mean that it was the right way. Guess what, things change. Clients change, technology changes what is possible. We change as individuals. The most successful businesses evolve. They recognise that change is inevitable. Through history there are many examples of large organisations who have failed and no longer exist and in many cases as a result of a reluctance to change who they were and what they did.

Often a big stumbling block for changing culture is simply…

Too many different personalities!

A lack of ability to decide what is the ‘tone’, what is the ‘personality’ of the firm. The inability to be able to decide on the right culture means we end up with no culture or, worse still, silo cultures and no one really knows who they work for and what is expected of them. This is a really dangerous place to be and not one arrived at by design, rather a lack of design.

This takes us to the final real challenge in changing culture. Very simply...

A lack of vision!

This can be read in a number of different ways. It could be a lack of vision for the business, the vision that drives the value proposition. What it is that the firm is trying to change in the world or deliver to its clients. It could also be a lack of vision from the top of the organisation in terms of strategic vision and it could simply be a lack of vision around the recognition of the importance culture plays in today’s highly competitive marketplace. Whether you are looking for client growth or building a high performing team capable of supporting your firm’s growth, culture matters.

Conclusions

Over this series of articles I have tried to take you on a journey. A journey that I have personally lived and breathed in my own accounting firm, Farnell Clarke. The good, the bad and the downright ugly have shaped my firm over the last 13 years or so. We are a long way from having cracked it. We continue to evolve, try new things and sometimes get it wrong. You know, this is ok, this is how we learn.

What I hope this series of articles has done is inspire you to think a little differently. Recognise that there is a different way, there is a whole new business model available to accounting firms to deliver better services and broader, rounded advice to our clients.

Much of what I have covered in these articles is available in longer form in my book The Digital Firm. It was written almost three years ago now so some of the thinking has been updated as lots has happened in that time.

One thing that has not changed is my excitement for the profession we all work in. We are riding a wave of change and there has STILL never been a better time to be an accountant in practice.

Do revisit the previous articles and build yourself an action plan. A plan that you and your team can work on to build a better, more profitable, more enjoyable firm and one that can deliver that financial peace of mind to your clients and support them to achieve their own business and financial goals. I wish you well on your ongoing digital journey.

Will Farnell - Founder, Farnell Clarke