The Evolving Employee DNA

By: Tom Barry, Managing Partner, Green Hasson Janks

Tom Barry

DNA is the genetic code of organisms. The dictionary defines it as “the fundamental and distinctive characteristics or qualities of someone or something.”

What does this have to do with accounting? Is this article about science? Not exactly. It is about the science – and art – of identifying and understanding an accounting firm’s evolving “DNA,” or culture, as the foundation for a successful organization and thriving employees. We are exploring how the future of the industry is requiring us to examine how we hire, develop and nurture our talent.

The Future of Accounting

An accounting firm’s DNA had typically been based on a historical legacy, carried over from an era where the profession looked far different than today – and certainly not reflecting where the profession is headed. Accountants were essentially historians, who were paid to look back at books and records and identify issues and errors. Fast forward, the role of accountant has evolved to that of a trusted advisor, one who can accurately provide clients with insights to illuminate good decisions. But with the advancements of technology, big data and the pace of technology commerce, accountants need to be trusted futurists. As my predecessor, Leon Janks, stated well:

“It’s now our job as advisors to sort through this data, analyze and determine the best practices to help our clients reach their potential and grow their business. Businesses exist in a very dynamic environment and management needs to be agile in order to make changes and anticipate the future.”

There are three main factors related to the evolution of accounting firms: technology, generational differences and diversity of thought.

Accounting Firms and Technology DNA

The accounting profession is 7,000 years old. The AICPA was founded in 1887. We can rest assured that change and evolution of the profession has occurred more times that we can imagine. So how is today different? In a word: technology. Technology is considered to be an evolutionary process in that it evolves exponentially, known as Moore’s Law. Each generation of technology speeds up the subsequent generations’ advancements, which causes accelerating change. It does not just feel like the rate technology changes is accelerating, it actually is. Therefore the DNA of tomorrow requires accountants to be well versed in their “toolbox”: the computer, and the impact of technology.

The Generational Impact on DNA

Now that a majority of a firm’s employees are in different generations from its leaders, old rules do not apply. Your business, your clients and your talent continue to evolve, so staying ahead means keeping vigilant on evolving trends, client needs and talent needs. One trend to watch is generational differences. Younger workers want a reason to come to work. They want to feel that they matter, that their work matters and that they are contributing to something bigger than themselves.

In 2017, millennials (born 1981-1996) made up 38% of the nation’s workforce, more than any other generation.[1] Going forward, millennials will dominate the accounting industry, comprising 75% of employees by 2025.[2] Generation Z (born 1996-present) will continue the evolution. We hear some older generations complain about the needs of younger workers, but their needs are now the business’s needs, and leadership has an opportunity to create an environment in which employees understand their generational differences and work together effectively.

The DNA of the Diversity of Thought

Our industry’s client experience is evolving from compliance to an advisory mindset. This is a change that involves aligning ourselves with the client’s needs and helping them reach the right solutions. Making this change takes a new skill set, and recruiting the right talent becomes even more important.

Creating teams that bring diversity of thought increases the opportunity to deepen the client experience and cross-pollinate internal learning across different backgrounds and levels of business acumen.

We are in a war for talent, and the need for people with a consultative mentality makes it even more difficult. We can look at this as an opportunity rather than a challenge, however. Defining your firm’s DNA includes defining what type of employee you need and want.

Having a diverse team is key for creating a consultative approach and developing the ability to ask the right questions. When employees asks questions that come from understanding the client’s culture, strengths, challenges, best practices and industry sector, they are more effective as consultants and advisors and provide a more meaningful client experience.

At Green Hasson Janks, we seek people who are genuinely curious and ask insightful questions. Our candidates are collaborative and like working as part of a team. They are problem-solvers. Candidates who match our DNA are not always easy to find through traditional means, and a broader perspective makes sense.

One reason for the smaller candidate pool is that the unemployment rate for accountants and auditors was 2.0% in the second quarter of 2018, much lower than the 4.0% national unemployment rate, according to the latest quarterly report from the U.S. Bureau of Labor Statistics (BLS).[3]

To find alternative talent pools that match a firm’s DNA, some are looking to individuals with disabilities, older workers, veterans, freelancers, apprenticeship programs, former employees or customers. Bringing in new types of employees adds diversity of thought and also can add new cultural or regional perspectives that can speed innovation.

Making talent acquisition changes based on your firm’s DNA also adds more roads to tomorrow’s success. For example, it has the potential for adding creativity and innovation to your business and the client experience. It has been proven that more diverse teams increase innovation and business outcomes. Innovative approaches and solutions may emerge through idea generation, teaming and collaboration. A wider range of people and thought may also lead to new product and service offerings that differentiate your firm and the client experience.

Where We Go From Here

To attract, develop and retain employees that are the right fit, a firm must be able to articulate its culture. Most can define somewhat random keywords (e.g., friendly, businesslike, conservative, liberal, technical, and specialized, etc.) but may not have an overarching definition that touches all aspects of the business. Agreeing on a definition is core to redefining a firm’s DNA. A culture is unique to every firm, and one size does not fit all.

We went through a yearlong process at Green Hasson Janks to define our culture in a way that reflected our values and could take us well into the future. We embraced the principles of Simon Sinek, who asks organizations to define “What is our Why?” The Why is our DNA. Each firm is different, with values that roll into their own unique Why. When those values are applied to behavior, the result is culture. Each individual also has their own Why, which is a filter through which they make choices, at work and at home, that lead to fulfillment.

With this in mind, we have been able to create a much more specific profile of the person that fits our DNA, our Why, our culture. A strong definition of the person we want in our organization streamlines the hiring process and aids in retaining and developing our talent as their careers unfold. That reduces HR cost and supports the employee’s happiness in working at our firm.

Employee DNA will continue to change, and accounting firm culture will continue to adapt and change to meet new worker and client needs. Firms that frequently define and redefine their DNA have an advantage.

Tom Barry is a CPA and Managing Partner at Green Hasson Janks, a Los Angeles accounting and consulting firm that specializes in nonprofit, food and beverage, health and wellness, and entertainment and media companies. Barry’s role is a combination of entrepreneur, partner, consultant, mentor and business advisor. He provides audit and accounting, tax and general business consulting services to clients in a variety of industries including waste management and recycling, manufacturing, distribution and the restaurant industry. He can be reached at tbarry@greenhassonjanks.com.

 

[1] https://www.accountingweb.com/practice/growth/millennials-now-make-up-largest-workforce-generation-in-us

[2] https://karbonhq.com/accountant-resources/articles/8-traits-of-millennials-that-will-benefit-your-accounting-firm

[3] https://www.roberthalf.com/blog/job-market/a-look-at-the-quarterly-accountant-unemployment-rate

Keiter Names Wallace as Managing Partner of Firm

Gary Wallace

Gary Wallace

Glen Allen, Va.-based Keiter (FY17 net revenue of $27 million) has named Gary Wallace as the firm’s new MP, effective Jan. 1, 2019. Wallace has more than 30 years of accounting experience both in the private and public sectors and most recently served as the tax department leader for Keiter. He is succeeding L. Michael Gracik Jr., who has served as MP of Keiter since 2014.

“This is a tremendous honor to be chosen by my fellow partners for this position,” says Wallace. “For the past 40 years, Keiter has helped thousands of businesses achieve their financial objectives. I look forward to furthering that tradition and leading our firm for continued success.”

In his new role, Wallace will oversee Keiter’s strategic direction, providing leadership on firm matters. He will also continue serving as a partner in the firm’s tax practice. He will be actively involved in the firm’s marketing and business development opportunities and remain engaged in community development and support.

Prior to joining Keiter in 2010, Wallace was the CFO for The Riverstone Group and CCA Industries. He acquired significant public accounting experience, as tax partner with the Richmond, Va., office of KPMG. In his more than 20 years at KPMG, Wallace was tax advisor to publicly and privately held business clients and individuals, principally in the retailing, distribution, real estate and financial services sectors.

In addition to Wallace’s position, Keiter announces that Gracik Jr. will become a director with the firm. In this new role, he will provide clients with tax advisory and succession planning consulting.

Wallace continued, “Mike Gracik has been a great MP for our firm. He was instrumental in growing firm revenues by 50%, expanding our team, growing our client base, and building our reputation as ‘Opportunity Advisors’ to the Central Virginia business community. I am thrilled that he has chosen to serve as a Director within our firm and know that we all will continue to benefit from his expertise.”

Among Wallace’s priorities as MP will be a continuation and expansion of the firm’s support and commitment to the local Richmond, Virginia community. Keiter has consistently been recognized both locally and nationally for its charitable contributions to not-for-profit organizations and volunteerism.

“I am so proud of our team at Keiter,” says Wallace. “They are among the best accounting and financial advisors in the business. More importantly, they are a compassionate team that is dedicated to finding new opportunities to serve our local community.  This year alone, they have provided more than 300 volunteer hours to local organizations.”

New MP, Five New Partners at Mauldin & Jenkins

Hanson Borders

Atlanta-based Mauldin & Jenkins (FY18 net revenue of $50.6 million) announces that Hanson Borders, previous Birmingham, Ala., office PIC and financial institutions group leader, became new MP of the firm Sept. 1.

Hanson began his career with Mauldin & Jenkins in 1989 and has 29 years of auditing, tax and consulting experience primarily in the financial services area. He replaces Donny Luker, who served as MP for the last nine years.

In addition, Mauldin & Jenkins announces that five professionals have been admitted as new partners:

Heather Batson

 Heather Batson, Chattanooga, Tenn. – Batson has been with the firm since 2003. Her experience includes audits for financial institutions, including public companies, not-for-profit organizations and employee benefit plans.

Nicole Cunningham, Birmingham, Ala. – Cunningham has been with the firm since 2005. Her experience includes audits for financial institutions, internal control audits, non-profit organization audits, HUD audits, and examinations of controls at service center organizations.

Derrick Cowart, Savannah, Ga. – Cowart is a partner in the governmental practice division. His experience covers a wide variety of state and local governments in Georgia and South Carolina. He has been practicing public accounting since 1985. He came to Mauldin & Jenkins in 2018 as part of the firm’s acquisition of a governmental auditing, accounting and consulting practice in Savannah, Ga., for which he practiced for over 27 years.

Michael Gordon

Michael Gordon, Atlanta – Gordon joined the firm in 2005. Since then, he has focused his career on audits for financial institutions and audits of employee benefit plans. Additionally, his experience includes assisting clients with FDICIA and SOX 404 testing, HUD compliance and regulatory reporting. His experience also includes audits of clients within the governmental sector and the health care industry.

Tim Lyons, Columbia, S.C. – Lyons recently transferred to the Columbia office from the Atlanta office. He specializes in service to clients in a wide range of industries including middle market and privately held businesses, employee benefit plans, higher education, not-for-profit organizations and governmental entities. His experience covers attestation services, consulting, and advisory work with a wide variety of clients throughout the Carolinas, Georgia and Tennessee.

BNN Elects MP, Hires New COO, Adds CFO

Dayton Benway

Portland, Maine-based Baker Newman Noyes (FY17 net revenue of $44.4 million), a 2018 IPA 100 firm, announced that Dayton Benway was chosen to succeed Carl Chatto as managing principal, effective Jan. 1, 2019.

The firm also formally announced the hiring of Anna Fincke as COO and Darren Hurlburt as the firm’s first CFO.

“In my term as managing principal with Baker Newman Noyes, I was able to oversee the integration of three mergers and a period of growth and expansion. Simultaneously, we have developed a depth of leadership that is ready to take up the mantle,” says Chatto. “The future is now, and we have equipped the firm with the leadership to take on the opportunities of the future in this ever-changing landscape. I am looking forward to returning to client service in a full-time capacity to work with clients and mentor staff.”

Anna Fincke

Benway was unanimously selected by the firm’s ownership. Benway is head of the firm’s health care practice and has been with the firm since 2000. As non-traditional CPA firm services become more important to growth, Benway’s ability to develop a team, create a culture of business development and accountability, and his leadership style are qualities the management committee sees as essential to the position.

In addition, the increased size and complexity of the firm brought about the need to add an experienced CFO to help guide the firm through the next phase of its natural evolution. Hurlburt will oversee the firm’s financial strategy and operations, with particular focus on financial reporting and analysis, forecasting and budgeting, regulatory compliance, financing agreements and process improvement. Hurlburt rejoins Baker Newman Noyes after an 18-year career in the financial services industry, having served as the controller, CFO and CEO for a Maine-based financial services company.

Fincke, the new COO, will provide leadership to the firm’s operations team, working closely with the principal group to develop and carry out the firm’s strategic priorities. Fincke specializes in strategy and operations, with experience working in industries from construction to food service. Fincke was previously a partner at a consulting and advisory firm, which specializes in the nonprofit sector. She has also served as vice president at a large Portland-based nonprofit.

Andersen Tax Greenwich Office Welcomes Managing Director

Crystal Germanese

San Francisco-based Andersen Tax (FY17 net revenue of $247 million) welcomes Crystal Germanese as a managing director in the Greenwich, Conn., office, joining the firm’s private client services practice.

She has over 15 years of experience and specializes in serving closely held businesses and high-net-worth individuals on tax matters ranging from income tax planning, compliance, specialized transactions, and family wealth and tax planning.

“We are excited to have Crystal join our Andersen Tax team,” says John Farro, managing director of the Greenwich office. “Her background in working with a variety of industries including retail, manufacturing/ distribution, real estate and construction, is a key element in the consulting and overall advice we provide to clients.”

Before joining Andersen Tax, Germanese was a partner at West Hartford, Conn.-based Blum Shapiro & Company (FY17 net revenue of $79.5 million). She gained a majority of her tax experience with the firm.

“Crystal represents all the qualities that are important to Andersen Tax’s best-in-class and seamless service,” says Andersen Tax CEO Mark Vorsatz. “Her expertise in working with high-net-worth individuals will play an important part in advancing the already reputable private client services practice in the Eastern region.”

Smith & Howard Names New MP

Sean Taylor

Smith & Howard of Atlanta (FY17 net revenue of $26.6 million) named Sean Taylor as MP, effective Jan. 1, 2019. Taylor assumes the role from longtime MP John Lucht, who will transition to a consultative role in 2019.

“We are extremely excited that Sean will become managing partner in January. He embodies the servant leadership skills and commitment to others’ success that have become the defining principles of our firm. His demonstrated leadership as current partner-in-charge of the Assurances Services group exemplifies the qualities that will propel our firm to the next level over the coming years,” Lucht says.

As MP, Taylor will oversee day-to-day operations, responsible for guiding the firm’s overall strategy, growth, innovation and culture across its audit, tax, accounting and advisory services.

“We owe John our deepest gratitude for the contributions he has made not just as Managing Partner, but throughout his 30-year career at Smith & Howard. His leadership has enabled us to strengthen our standing as an industry leader. Our firm is well-positioned to capitalize on the opportunities ahead,” Taylor says. “I am excited to lead Smith & Howard into the next phase of the firm’s life cycle by focusing on innovation, expanding client service solutions, attracting and welcoming new talent and stretching our footprint across the region.”

 

EY Appoints New MP for the New York Office

Herb Engert

EY today announced the appointment of Herb Engert as the new MP of the New York office.

Engert, who recently led the firm’s Global Private Equity practice, will now be responsible for the overall client service and internal management at one of the region’s largest professional services organizations. The New York area offices are home to over 9,000 assurance, tax, transaction and consulting professionals.

“I am honored to be named the managing partner of the firm’s largest U.S. office, and eager to drive the continued expansion of the EY footprint in New York,” says Engert. “EY has supported me both personally and professionally throughout my career at the firm, and I’m looking forward to giving back by enhancing our already outstanding client service in the New York area.”

In this role, Engert will bring over 28 years of experience to guide market growth, regional strategy, people engagement, client services and operations in New York. As the firm continues to bolster its presence in the region, with the recent announcement of the move of its U.S. headquarters to a new office at 1 Manhattan West, Engert will oversee the current flagship location at 5 Times Square as well as the new location.

“Our firm will be going through some exciting, transformative changes in the next couple of years, and I’m thrilled to be a part of the change, and help bring innovative solutions to our ever-expanding client base,” says Engert.

Rich Jeanneret, Vice Chair and Northeast Region MP, says, “We are very excited to welcome Herb to the Northeast region’s leadership team. With his market tenacity, forward-looking approach, and ability to unite people and create communities, we are keen to see the positive impact he will serve in accelerating the office’s growth and culture.”

Engert will assume the role held by Mark Besca, who will work in EY Americas Assurance focusing on accounts and with the Professional Practice Quality and Regulatory Matters (PPQRM) group.

MCM CPAs & Advisors Names Next MP

Brad Smith

Brad Smith

Louisville, Ky.-based MCM CPAs & Advisors (FY17 net revenue of $54 million) recently appointed its next MP. Brad Smith, MCM’s current assurance services team leader, will succeed current MP Diane Medley on July 1, 2019. This transition is a part of the Medley’s intended succession plan, aimed at providing a springboard for future leaders and allowing the firm to continue growing and serving clients well into the future.

“This is a testament to the dedication, thoughtfulness and leadership that Brad has shown in his nearly 16 years with the firm, and especially in his stewardship of MCM’s assurance services team,” says Medley. “Under his direction, MCM has a bright future ahead of it.”

Over the course of the next year, Medley and Smith will work together to gradually transition the role across all seven of the firm’s offices in Kentucky, Indiana and Ohio. Following the transition, Medley will remain with MCM full-time in the role of chair, where she will continue to work with select clients and serve in a strategic firm leadership position.

Smith has been with MCM since 2002. His primary focus with clients is middle market growth-oriented companies in the manufacturing, distribution, services and construction industry niches.

“I look forward to working with Diane and our partners as we continue to execute on MCM’s strategic plan,” says Smith. “I want to ensure we’re always building on the strong foundation provided by our firm’s founders.”

Deloitte Board Fails to Re-Nominate CEO Engelbert

Catherine Engelbert

Catherine Engelbert

New York-based Deloitte (FY17 net revenue of $18.6 billion) has told its partners that the first woman to run a Big 4 firm in the U.S., Cathy Engelbert, has not been renominated for a second four-year term, the Wall Street Journal reported June 28.

The Journal reported that the announcement “stunned” Deloitte partners and that it came as a “complete shock.” The newspaper reported, “The rationale wasn’t made clear, and dozens of partners, unhappy the firm didn’t provide an explanation, sent a letter to Deloitte’s board demanding more information and transparency on the matter.”

Deloitte did not comment, saying it will provide an update when the firm has its formal leadership election in early 2019. Engelbert also did not provide the Journal with a comment.

Engelbert, who has been with the company since 1986, was named CEO in 2015. She ran the audit practice prior to becoming CEO.

The Journal, citing anonymous sources, reported that some are concerned that the move signifies a shift in focus toward consulting and away from auditing. One person “familiar with Deloitte’s CEO election process,” told the Journal that the situation “certainly isn’t just normal succession.”

Engelbert possibly could be renominated for a second term at a later phase of Deloitte’s CEO-election process. A candidate recommended by the board must be approved by two-thirds of Deloitte’s voting partners and principals. Her current term ends next spring.

Since Deloitte named Engelbert CEO, KPMG named Lynne Doughtie as chairwoman and CEO in 2015. At Ernst & Young, Kelly Grier became chairwoman and managing partner July 1.

Enriquez Elected Managing Shareholder of Briggs & Veselka

Sheila Enriquez

Sheila Enriquez

Sheila Enriquez was elected managing shareholder of Houston-based Briggs & Veselka Co. (FY16 net revenue of $35.4 million). She will assume the role from John Flatowicz, effective July 1. Flatowicz will continue his roles as an audit shareholder and member of the Executive Committee.

“Sheila’s vision and drive are ideal for the firm–and an industry–in transition as future growth and relevance will be driven by the rapid adoption of new technologies and the expansion of consulting services,” says Flatowicz. “But more importantly, Sheila’s passion for developing people and promulgating the firm’s values is what makes her ideally suited for leading the firm to the next level.”

“I am honored to assume this role from John, who has been so vital in driving firm growth and client satisfaction during his tenure as managing shareholder,” says Enriquez. “My goal is to grow to a top 50 CPA firm so we can provide more value to our clients and opportunities to our people, by strengthening our core services of tax and audit, expanding our related advisory services, and staying on top of innovation and technological developments in our profession.”

Enriquez has been with the firm since 2007 and has been a shareholder since 2010. In addition to her responsibilities as an audit shareholder, she leads the firm’s forensic, valuation and litigation support services, and its consulting practices. Enriquez was named one of Women Who Mean Business by the Houston Business Journal in 2017.