The 6-Pillar Foundation for Building a Powerful Firm

Is there a secret to building a progressive and resilient accounting firm? Many firm owners point to the constraint of time as a chief obstacle to progress, but after talking to over 150 thought leaders in accounting on my Disruptors podcast, I realized that the true constraint isn’t time, but structure.

As I reflected on the commonalities among the organizations whose leaders I interviewed, it occurred to me that they had built their firms on a foundation of six pillars, mostly without awareness of it. None of them do it perfectly, and these pillars show up differently in every organization. What I find fascinating is that I didn’t (and still don’t) ask my guests about these concepts.

Every time I’ve shared this framework with someone, I get the same response: a slow nod of the head as they tell me it makes sense, but I can tell that until I lay it out to them, they hadn’t connected the dots themselves. I can almost see the lightbulb lighting up in their head.

So, what’s this secret structure that’s hiding in plain sight?

The six pillars

Solid North Star

This is a vision that acts as the filter for every decision. It can be as simple as a commitment to do good work and provide excellent service. A North Star can also be a huge aspirational goal for the organization. It can also be a set of shared values, or something in between. It’s not that framed mission statement on the breakroom wall. It’s a concept woven deeply into the culture of a firm.

However, a firm’s North Star isn’t forever set in stone. It will change as the firm adapts to our ever-changing world.

Sharrin Fuller, founder and CEO of Glass Wallet Ventures, described how her own North Star had always been to buy her mother a house, but after her mother passed away, that changed completely. She had to rebuild her firm's direction around a new one.

Every firm’s North Star will be different. Crucially, it becomes a lens for every decision – the clients to work with, the people to hire, and how much or even whether to grow.

Processes and systems

Even though we accountants love checklists, we haven’t always created documented standard processes for doing our work. Jody Padar, The Radical CPA, noted that many firms don’t have standardized processes. “I would say if you have 200 clients, you probably do things 20 different ways,” she said.

I put this second, because many of my podcast guests noted that if they didn’t do this before hiring their first person, they were creating problems down the road. Questian Telka, founder of ReQoncile Financials, told me that “If I would have done that from right out of the gate, and if I would have had some other foundational pieces in place, my life would be a lot easier now.”

These processes should be continuously optimized and automated where possible. While they will help define the particular way your firm does the work and what makes your firm unique, they should never become a bureaucratic obstacle.

Right person in the right seat

In his book, From Good to Great, Jim Collins put it best: “Get the right people on the bus and get those people in the right seats on the bus.” Many of my guests emphasized hiring for culture fit because it’s easier to teach someone the skills than it is to teach them to be a nice person.

Roman Villard, founder of Full Send, has a slightly different take. “We’re never looking for a culture fit to come join our firm. We’re looking for a culture add, meaning there could be people who fit our culture great. However, there could be other people who could add a great deal to our culture,” he explained. “So, what are those differences in perspectives and thinking and backgrounds that can yield a far richer culture versus one that's kind of just a similar product of what you already have?”

Trust and transparency

Do you trust your team to make the right calls, and is your reasoning visible to them? Does your team trust you to make the right decisions? This requires a level of vulnerability that’s not available to everyone. It also requires a willingness to have difficult conversations and the willingness to be wrong.

Brandon Hall, founder of Hall CPA, talked about how he was trying to make tax season better than the 80-hour weeks that are too often the norm, with the goal of enriching the lives of his people. “We haven’t fully figured it out. But we’re always testing and trying to figure it out,” he said. “We’re going to always try to improve. I’ll tell them what I’m trying to do. I’ll tell them what the expected result is. And I’ll also tell them there’s a good chance this isn’t going to work.”

Communication

Leaders need to know the status of projects. Team members need to know what their priorities are and when their deliverables are due. Having a central repository for standard processes and firm knowledge helps keep everyone on the same page.

Many of my guests also talked about the importance of open conversations with clients. “How many firms do you know of who actually take the time to ask their new clients, ‘What are your goals? What's your five-year plan? What's your 10-year plan?’” Blake Oliver, co-founder of Earmark, told me. “They don’t, and it's a catch-22 because they have too many clients right now to spend any time with their clients.”

Accountability system

This must flow in multiple directions to eliminate bottlenecks. Accountability includes how work gets assigned, what’s expected of the team, and what’s expected of clients.

One way many of my podcast guests demonstrated accountability to their teams was through their willingness to fire the bad clients. “Every month I try to fire a client that sucks, and every month I try to create a new client, and if I do that on a regular basis, I can always stay the same size and have a better business by turning over 10% a year,” said Mike Sylvester, co-founder of SBS CPA Group. “If you fired 10% of your clients and gained 10% of better clients, in three years, your firm's not going to look the same.”

A foundation for success

These six pillars show up differently in every firm. I can’t point to any one firm that has each of them down pat. They’re not destinations to be achieved, but rather principles to build a firm around. They are part of what creates success, but they’re not the whole recipe for success.

In today’s tech-focused world, it may seem quaint to focus on the messy human stuff that’s been largely ignored by our training as bookkeepers and accountants. Isn’t it more valuable to learn more about using AI and which apps will work best for us?

However, when I ask my guests on the Disruptors to imagine what accounting will be like in 10 years, a common refrain is that we will have even greater need for the human skills of empathy, trust, communication, and accountability. This foundation of the “messy human stuff” that goes underneath the technology will become even more important than ever.