IPA Spotlight On … Daniel Young, Schenck

Name: Daniel Young

Title: President

Firm: Appleton, Wis.-based Schenck (FY16 net revenue of $80.5 million)

Daniel Young

Accomplishments:

  • Managing shareholder of the Green Bay, Wis., office for 10 years before being elected president in 2018
  • Completed four three-year terms on Schenck’s board of directors and was named vice chair in 2015
  • Named director of industry teams in 2013, providing leadership and strategic direction for the firm’s nine industry teams
  • 2016 recipient of the University of Wisconsin-Green Bay Distinguished Alumni Award

With a few months under your belt as president, what’s the one thing that’s surprised you the most about the role? 

As a longtime Schenck board member, and with experience as board vice chair and partner-in-charge in the Green Bay office, I was aware of most opportunities within the firm and the direction we were going. I also knew the people in the firm, which is an advantage an external candidate wouldn’t have had. However, what I hadn’t given much thought to was how my day-to-day relationships would change as I transitioned most of the clients for which I had lead responsibility to other Schenck team members. While I miss the client interaction, I am finding it really rewarding to further grow relationships with our internal team. I look forward to meeting more clients in all our markets and hearing how we can continue to support their growth and success and deliver on our Schenck Way for client service.

You’ve said one of your goals is to work on people initiatives. How does the firm work to prepare the next generation of leaders?

Our firm has wildly important goals (WIGs) and one is to build team member expertise using the 70:20:10 model. This guides how people learn: 70% percent on the job, 20% in structured coaching and 10% in formal training. Each WIG contains leading activities that we measure to ensure we are achieving the goal. In addition, we listen to our people. We survey our team members to monitor internal engagement and identify areas of opportunity. We share what we’ve learned in local meetings and communicate action plans.

We also offer programs that support our team members. Our Total Rewards Guiding Principles help us make consistent decisions related to compensation, benefits and creating a life-friendly work environment. Schenck’s Growth & Development program helps team members create a career plan that allows them opportunities to build their skills.

What are your growth goals for Schenck, and do those goals involve organic growth, merging in smaller firms, or both? Any plans to expand beyond Wisconsin?

Our first WIG is about firm growth, and we’re looking to increase our organic growth by a certain percentage by Sept. 30, 2019. As with our other WIGs, we have battles and leading activities that are monitored using scorecards. Under our growth WIG, we have a goal related to targeted acquisitions, which helps us identify and pursue good targets. As far as plans, we’ve always intended to expand our reach, possibly in the Madison market within Wisconsin and the northern Illinois and Twin Cities markets outside the state.

When your first year is over, how will you measure your own success?

One of the things I was asked to do as president was to execute our firm-wide strategies. I will first look to the scorecards to see how well we’ve done. In addition, I have a detailed accountability plan that was created in conjunction with our board of directors. It provides a framework of support that allows me to focus on certain activities that help uphold the vision and strategy of the firm, and I will measure my success against that. When these are done well, success will be found in the value we bring our clients and the growth of team members that builds the future of the firm.

Final thoughts?

At Schenck, we’re committed to making a difference for our clients, people and communities. Our own growth has better positioned us to support our clients. We believe that doing things right and doing them well is what will create opportunities that drive success for our people, our clients, our communities and ultimately our firm. I’m excited to be on this journey and look forward to seeing what the future holds.

Do you know someone else who would make a good Spotlight? Contact Christina Camara.

IPA INSIDER: March 2018 News

Listed below are the Top 10 most-read stories on the INSIDE Public Accounting blog for the month of March.

  1. CohnReznick Names Duffany MP of Tax Practice
  2. Global Recruitment Trends
  3. IPA Spotlight On … Colin Farmer, Alliott Group
  4. Marketers Prepare to Act as Change Agents for their Firms in 2018
  5. New White Paper Identifies Potential Blockchain Implications for Audit and Assurance
  6. Marcum Launches Robotic Process Automation Service for Clients
  7. Deloitte Publishes Equity Partner Gender Earnings Gap
  8. Briggs & Veselka Expands Houston Tax Practice with Acquisition
  9. Client Experience Impacts Firm Growth
  10. Why Accenture Has the Most Blockchain Job Openings in the World

 

IPA Spotlight On … Leah Gonzales, MaloneBailey

Name: Leah Gonzales

Firm: Houston-based MaloneBailey

Title: Audit Partner

Accomplishments:

Leah Gonzales

Leah Gonzales

  • Over 20 years of public accounting experience
  • Member of MaloneBailey’s management team for almost 10 years
  • Promoted to audit partner in April 2017
  • Key leader in MaloneBailey’s quality control initiatives as well as its in-house training and mentor programs

I understand that you came to MaloneBailey in 2008 from a Big 4 firm. Was a better work-life balance part of the reason for the move?

Work-life balance was a factor. I spent years at PwC, but managing family and work became tough because of my constant traveling and working late hours. I thought about leaving public accounting for industry and its better hours, but knew public accounting was my passion. A friend of mine introduced me to MaloneBailey and its unique opportunity intrigued me. MaloneBailey’s challenging work environment is complemented by initiatives like flexible workplace options and a business casual environment, as well as providing support (i.e. training and mentorship) its employees need to reach their full potential.

The U.S. Bureau of Labor Statistics reports that females make up more than half of all accountants and auditors in the U.S., but only 22% of partners. At MaloneBailey, 33.3% of partners are female. Why the difference?

I believe our higher than average female partner percentage can be attributed in part to work-life balance initiatives. Flexibility and public accounting are two things that don’t always go hand in hand. Joining the two in a thoughtful, constructive and effective way is advantageous to women. Having the option to work from home once a week or not travel as much is something that I truly appreciate. MaloneBailey has had a women’s initiative in the past, but we are working on reinvigorating it in a new way. More to come on this initiative so stay tuned.

What’s the best way to retain female accounting/auditing professionals at mid-career – a time when many seem to leave the workforce?

It’s important that we show the women and mothers in the workforce that they are valued and important. Often times, women with young children feel a draw to be home with their children instead of returning to work. However, if we create understanding and flexible workplace options, I believe women will have the opportunity to spend more time with their families and do the work they love. Finding that middle ground where women feel like they can have both a family and career at MaloneBailey is critical to retention and something we strive to do and improve each year.

With the advent of Artificial Intelligence, professional observers are predicting that the audit process may undergo radical change in the near future. What’s your view?

I believe AI can help auditors work through and process greater volumes of information at a much faster pace. While the use of AI will likely streamline the audit process, the auditor’s judgment and evaluation of the resulting data is still a critical aspect of the audit. MaloneBailey has always embraced the use of technology where it makes sense and we are excited to see how AI will impact the profession in the near future.

Final thoughts?

My advice to young women entering into the accounting field would be to have passion for the work you do. Once you have that and truly enjoy what you do, the long hours and challenging times will be a little easier. It may not necessarily feel like work. I’ve stayed so long in my career because I truly love what I do. What I’ve found in MaloneBailey is a firm that understands the importance of my family time and one that has worked hard to implement initiatives that allow me to do the work I love while having a family.

Do you know someone else who would make a good Spotlight? Contact Christina Camara.

Platt’s Perspective: Don’t Like Disruption? ‘Expect An Earthquake Every Three Years’ Says McKinsey CEO

Mike Platt

Mike Platt

Disciplined. Compliant. Orderly. Methodical. Those are the driving personality characteristics of most left-brained accountants that I know. Doing things the right way. Debits equal credits. There is a natural order to accounting, and that has tended to attract many similar-thinking people to the profession.

It also has created a profession filled with practitioners who are, at their core, fundamentally resistant to change. Any leader who has undertaken a change effort has encountered this group – not on board at best, actively resistant at worst. “Why do we need to change, everything has been going well so far, so why fool with success,” is the cry most often heard from the group.

In the past, shaking up the status quo even once a decade was a painful process for this group. Dominic Barton, CEO of global consulting giant McKinsey, recently told The Australian Financial Review in an interview that large companies will need to massively restructure to the point that they will “expect an earthquake every three years.”

With high partner compensation numbers, there’s a tangible lifestyle measurement at risk. After all, there have been calls for change before, the profession has made small, incremental adjustments to its trajectory, and “we’re doing just fine as we are, thank you.”

But this time it’s different. This time, the pace is lightning fast. The image that comes to mind is my own experience of skydiving for the first time. Door open, a white-knuckled grip on the doorframe, feet firmly on a small step. As the instructor encouraged me to “climb out,” I warily slid one hand on to the wing strut. “Keep going” the instructor urged…“Keep going – I’ll talk you through it.” As I finally lifted my feet off the step, the realization that I was no longer tethered to the safety of the plane, hit me. “LET GO!” the instructor bellowed, and I let go.

As I watched the plane fly away, my heart stopped for a moment until I heard the whoosh of a parachute opening above my head. And then silence. Beauty all around me. A feeling of genuine exhilaration. As I glided down to Earth, I felt an accomplishment and satisfaction. My final thought was “I jumped out of a plane and landed safely on the ground.”

For those leading the change, recognize that you are flying the plane filled with some white-knuckled staff and partners who are perfectly comfortable inside the safety of the plane. Never underestimate the significance of encouragement to get your group to sit in an open doorway with feet hanging out at 10,000 feet above the ground; to be the voice of “keep going,” “keep going,” “keep going.”

Understand how critical it is to them to hear your calm and confident instructions to “now LET GO!” As you talk them through their maiden flight and land them safely, they will gain the courage and the confidence to go back up in the plane again – if McKinsey is right – another three years from now as you continue to create an organization whose core competency is the ability to adapt to change.

IPA Spotlight On … Colin Farmer, Alliott Group

Name: Colin Farmer

Title: Worldwide Chairman

Association: Alliott Group

Accomplishments:

Colin Farmer

Colin Farmer

  • MP at Alliotts, founded in 1869, an independent mid-tier firm of Chartered Accountants with offices in London and Guildford, England.
  • Played significant role in helping to develop Alliott Group over the last 20 years from a relatively small and informal grouping of firms into a commercially focused alliance with a foothold in many of the world’s commercial centers.

Alliott Group is an association of more than 170 independent accounting and law firms. Do you foresee competition emerging between the two groups as the Big 4 expand in the U.K. and PwC opens a firm in Washington, D.C.?

From what I can see, the Big 4 are more focused on selectively picking off areas of law that complement their existing services. Areas that are vulnerable include inter alia and immigration, which sit tidily with expat tax work, and employment law, which ties in nicely with HR consulting, compliance, commercial contracts and due diligence. It’s not difficult to imagine the Big 4 starting to offer a one-stop shop service. Competition is healthy, and for clients it makes sense – they can deal with a single vendor, realize greater efficiencies and be more confident that ‘the left hand knows what the right hand is doing.’ Alliott Group has been a multidisciplinary alliance since 2004, so we are firm believers in the benefits clients can enjoy as a result of independent firms of accountants and lawyers working together closely – they are natural partners and able to meet the total needs of the client.

You’ve been involved in Alliott Group for over 20 years. How has the organization evolved?

Alliott Group has been through much change in 20 years – we are now in over 60 countries and have 25 member firms in North America alone. There is now a very solid membership core. There have been the inevitable growing pains that any expanding business goes through, but the end result is that we have become a commercially focused organization that is aligned with the needs of growing professional firms and their clients. Just as important is our success in retaining and developing an underlying group culture that emphasizes the importance to business of strong interpersonal relationships between professional people at all levels of the firm.

What are your plans for expanding geographically?

I always watch with interest as some international associations of independent firms bring in new member firms nearly every month. You have to wonder how rigorous the due diligence process is behind some of these appointments. Organic, sustainable growth is of greater interest to us. While one of our objectives is to have an accounting and law firm member presence in every U.S. state and in every major market worldwide, there has to be a strong business case for expansion. Specific regions we are targeting for further growth include North and South America and Africa. However, firms have to understand from the start what it means to be an Alliott Group member firm. We will continue to hand-pick member firms based on the needs of our member firms’ clients.

Are emerging technologies such as blockchain, AI and data analytics an opportunity or a threat for the accounting profession?

The efficiencies generated by new technologies present threats to specific service lines provided by accounting (and law) firms – however, they will disrupt all industries. Most of these technologies, however, are not quite there yet. Technologies based on predictive analytics are impressive, but we are still some years away from computers being smarter than specialist (human) accountants! New technologies are going to be at the center of accountancy and law services in the future. Accountants need to embrace these changes and collaborate with technology businesses so that they can connect with tomorrow’s business leaders and the next generation of digital native accountants. Firms need to work out now how they fit into tomorrow’s client world, what their competitive differentiator is, and dare I say it, how they will add value rather than provide traditional services that look set to be commoditized.

How do you see Alliott Group changing 20 years from now?

We are in an unprecedented era of change – the ground is shifting under our feet on so many levels, with technology changing business models, people and the way professional services are procured. We feel that our vision, strong leadership and strategic plan means that we are well equipped to thrive in a market sector with a clear need for greater efficiency and cost effectiveness. Alliances such as ours will continue to provide an alternative, attractive model for sourcing high-caliber advisory services. In our view, too many associations are living on past glories and failing to learn from what is happening in the wider business world. Alliott Group and our members need to be bold in their thinking and to embrace wider opportunities to collaborate. We plan to disrupt rather than be disrupted.

Doing Business in Europe? New Privacy Rules Go into Effect May 25

The General Data Protection Regulation (GDPR), which replaces the 1998 Data Protection Act, is a new series of privacy regulations that apply to anyone who stores or processes personal information of European Union citizens or residents, regardless of a company’s physical presence in Europe. An implementation deadline of May 25, 2018 has been set by the European Union, and North American firms who deal with clients overseas need to be in compliance or face hefty fines.

The GDPR defines personal information as anything that can be used to identify a person – an identification number, bank account number, or simply a name and email address. If personal data is involved in a data breach then the individual must be notified within 72 hours of discovery. Under the GDPR, individuals have other enhanced rights including:

  • The right to erasure, also known as the right to be forgotten. An individual has the right to request their data be deleted, including any backups or cloud storage.
  • The right to be informed. Firms are obligated to provide fair processing information, typically through a privacy notice, which is written in clear language rather than legal jargon.
  • The right to object. Individuals can object to the processing of their data and to direct marketing.

Organizations that process personal data must have a lawful basis for doing so. GDPR outlines six bases, including fulfilling a necessary contractual obligation for clients or obtaining explicit (rather than implied) consent. Firms must determine the lawful basis, and document it, before processing.

If one thing is clear about the GDPR, it’s that whatever you do, it must be documented. This documentation could be the duty of a Data Protection Officer (DPO), which organizations are required to appoint in some circumstances, such as when information is processed on a large scale. The DPO has responsibility for data protection compliance and is the first point of contact for any data protection activities. The GDPR allows for this position to be an existing employee, as long as there is no conflict of interest and the professional duties are compatible.

Questions your firm should be asking: 1) Is your privacy notice written clearly? 2) Do your processes uphold privacy by design? 3) Do you have a breach notification plan? 4) Do you engage a third party to process any personal data?

Those found in violation of the GDPR could be fined up to 4% of their annual revenue, or €20 million, whichever is greater. However, according to the European Commission, the most important aspect of the GDPR is that it allows for client trust and confidence that their sensitive personal information is being handled with appropriate care. Only 15% of people feel they have complete control over the information they provide online, the commission says.

Helpful resources:

IPA INSIDER: February 2018 News

Listed below are the Top 10 most-read stories on the INSIDE Public Accounting blog for the month of February.

  1. Sikich Admits Three New Partners
  2. 2018 AI Predictions from PwC
  3. CBIZ Acquires Laurus Transaction Advisors
  4. Two Chicago-area Firms Merge
  5. Settlement Reached in Andersen Tax Trademark Dispute in California
  6. Mazars USA Admits Soussan as Partner in Manufacturing and Distribution Practice
  7. Five Workplace Issues We’ll Be Talking About In 2018
  8. RSM Expands Consulting Services with Acquisition of SecureState
  9. BDO USA Expands Health Care Advisory Services Practice
  10. Baker Tilly France Joins Allinial Global

Platt’s Perspective: How Much Of Your Partners’ Time Is Spent On Partner-Level Activities?

Mike Platt

Mike Platt

For years I’ve asked a simple question of my clients: “Think about all of the hours your partner group collectively spends on firm business each year. Raise your hand if you believe that more than 80% of those hours are spent doing partner-level work – however you define that.”

When I get no responses, the next offer is “70%?” A hand or two goes up. “Sixty percent?” Maybe a quarter of the hands are visible. “Fifty percent?” Without fail, about half the hands are finally in the air when presented with the 50% option. To spare the rest the embarrassment of raising their hands at levels below 50%, I stop there.

In this unscientific – but consistent – poll of firm leaders, the conclusion is that partners spend more than half their time on work that should be delegated.

The reasons are varied. For some partners, grinding through staff-level work brings them cozily back to their comfort zones. Some don’t trust the quality of subordinates’ work. Others are short-staffed and can’t delegate work. And for some, prioritizing the highest and best use of their non-billable time can devolve into “what can I check off my to-do list?” Too often, that work is not a partner-level activity that will help the firm grow.

The result of all this? Profitability may suffer. Staff engagement suffers because staff know partners will jump in and change things anyway. Strategic planning and brainstorming suffers at the partner level because there is never enough time to work on the business. Partner growth and development suffers because partners are not being challenged. Ultimately the partner’s value to the firm suffers because compensation levels are incompatible with their staff-level activities.

As client needs become more complex, partners will need to step up their game. As staffing leverage continues to grow, as it has for more than 15 years, partners will no longer be able to hide behind staff-level work. As the profession continues to evolve, firms will demand their owners meet the complex demands of the future, and continually raise the bar on what being a partner really requires.

If you want to make an impact on your firm this year, have your partner group commit to increasing their time doing partner-level work from 50% to 60%. It seems like a little step, but it is entirely achievable and will help build the confidence to keep going to 70%, 80%, 90% and beyond.

IPA Spotlight On … Eric Hansen, Chair, AICPA

Name: Eric Hansen

Title: Chair

Eric Hansen

Eric Hansen

Firm: AICPA

Accomplishments:

  • COO of BKD CPAs & Advisors, oversees firmwide operations and acts as liaison between BKD’s national office and its four regions.
  •  Became AICPA chair Feb. 1 and will serve in that capacity until May 2019.
  • An Eagle Scout, he extolled the virtues of preparation and anticipation in his acceptance speech following his election as chair.
  • Was part of the leadership team responsible for the launch the Association of International Certified Professional Accountants (Association), which represents 650,000 members and students worldwide.

What are your top goals as chair?

The way I see it, there are three actions we must take today to be ready for tomorrow. First, we must harness technology to create more value for clients and businesses by elevating quality in existing services and taking the lead in emerging areas. This includes a focus on auditing in the future, and new and emerging attest services. Second, we must embrace our role in a hyper-connected, global society, extending our influence to protect the public interest amid increasing complexity. Creating the Association was a huge step toward a platform that helps us pursue this goal. And third, we must invest in our most important asset – our people – by evolving skills and competencies, advancing learning opportunities and cultivating future leaders.

What more should be done to advance CPAs’ understanding and implementation of AI, blockchain and data analytics?

One area of focus for the Association is integrating data analytics into the auditing process to enhance quality and maintain the relevance of this foundational CPA service. The AICPA and Rutgers Business School are partnering on a research initiative to demonstrate how this integration of data analytics can lead to auditing advancements. We also must focus on developing the higher-order competencies. To that end, we launched a new version of the Uniform CPA Exam last year that places a greater emphasis on cognitive skills such as critical thinking and analytical ability. My advice here is simple. Every member of our profession needs to take personal responsibility for the development of the skills they need to succeed in the future. Don’t wait for it to come your way.

As a former member of AICPA Task Force on the Future of Learning, what changes do you foresee in the AICPA’s educational offerings?

Through the Future of Learning initiative, we are transforming the way learning is delivered with innovative technologies that blend text, audio, graphics, video, 3-D animation and interactivity to enhance learning. Social learning, virtual group study and interactive exercises increase engagement with hands-on application. We’re also making use of new learning models, launching a new bite-sized learning series called Human Intelligence, which is focused on the skills and competencies needed for success in the future. And then there is our leadership development. The AICPA Leadership Academy was established to address succession planning and to increase diversity and inclusion in leadership. Beyond that, we are expanding access to competency-enhancing tools and resources through the Association. Our research on the future of finance will be used to update the competency framework and syllabus for CGMA.

How do you envision the scope and reach of professional accountancy expanding in an increasingly connected world?

It is essential for today’s leaders to look beyond definitions, demographics and geographic dimensions that once constrained the scope and reach of professional accountancy. I’m a CGMA, as well as a CPA, so I’m aware of the need to serve clients and the public interest with a holistic, global focus. Public accounting’s focus on auditing and taxes remains a critical part of the business world. And the value management accounting brings to the corporate finance function is equally important. Both disciplines are likely to grow in importance as our global society becomes both more immediate and more complex. Our new Association, formed with the Chartered Institute of Management Accountants, is all about meeting the challenges of our increasingly hyper-connected world.

Final thoughts?

You and I see the rapid pace of change – in the world of accounting and all around us. What’s needed to meet the challenge such change brings is a bias for action and the courage to be bold. As my fellow Missourian, and former U.S. President Harry Truman said, “Progress occurs when courageous, skillful leaders seize the opportunity to change things for the better.” At the AICPA, I’m blessed to be surrounded by so many skilled, courageous leaders who share that bias for action. Working together, we’ll make the CPA profession even more relevant in the future than it is today.

Do you know someone else who would make a good Spotlight? Contact Christina Camara.

INSIDE Public Accounting Appoints 2018 Advisory Board Members

INSIDE Public Accounting has named six accounting firm leaders to its 2018 Advisory Board. The mission of the Advisory Board is to assist The Platt Group / INSIDE Public Accounting in identifying new business opportunities, and expanding products and services to better serve current and future clients.

The 2018 Advisory Board members include:

  • Kelly Bernakevitch, Executive VP of Operations, Finance & International, Calgary, Alberta-based MNP LLP
  • Lynne Born, CEO, New York-based Perelson Weiner
  • Lori Colvin, Chief Marketing Officer, San Ramon, Calif.-based Armanino LLP
  • Cody Page, Chief Operating Officer, Peterson Sullivan of Seattle
  • Shaun Powell, Director of Finance, Columbus, Ohio-based GBQ Partners
  • Steve Williams, Managing Partner, HMWC CPAs & Business Advisors of Tustin, Calif.

Bernakevitch is a member of MNP’s executive team and is responsible for overseeing the firm’s international interests, procurement, operations, finance and real estate groups. He previously served as the Executive Vice President, Prairies, as well as Regional Managing Partner. He was an elected member of MNP’s Board of Directors and has chaired a number of committees.

Born focuses on strategic planning and go-to-market initiatives in a variety of niche, industry and service areas that drive Perelson Weiner’s business objectives forward. She has extensive expertise in professional service firm management, specifically in the financial services and high-net-worth arena. She specializes in succession planning, change management and the design of best-in-class leadership and development programs for next-generation career growth.

Colvin started with Armanino in 1999 and leads the marketing efforts for the core accounting, tax and consulting services along with the expanding services of information technology consulting and financial planning. She has more than 25 years’ experience in sales and marketing.

Page is responsible for overseeing the business operations of Peterson Sullivan across all departments and practice areas. He works closely with the administrative directors and managers responsible for human resources, IT, resource management, accounting, facilities and office services.

Powell, director of finance at GBQ, joined the firm in 2002. Always looking for ideas to save the firm money, improve its efficiency or to provide better benefits for its employees, he knows that a company is made up of more than just debits and credits – it’s made up of people.

Williams specializes in consulting services to medical practices, as well as tax and financial planning. He is PIC of two practices at HMWC CPAs: health care services and information and technology services. His tax and financial planning services include tax minimization strategies, retirement planning, planning and structuring for complex business/personal transactions, and estate planning.

The Platt Group, based in Indianapolis, was founded in 2006 by husband and wife team Mike and Kelly Platt. The highly regarded publication was formerly known as Bowman’s Accounting Report. Today, IPA features interviews with top leaders in the profession on all aspects of firm management, and annually ranks and analyzes data from the top 300 firms in the nation. The Platt Group is dedicated to helping firm leaders, and their firms, achieve their ultimate potential by researching the latest trends, benchmarking leading firms and working with leaders to share and garner knowledge.