By Hitendra Patil
In What CPA Firms Could Learn from Google’s Alphabet, we identified 13 lessons CPA firms can learn in strategy and innovation from Google’s founders.
Ever since Google created Alphabet, researchers have been analyzing the possibilities. In a recent MIT Technology Review, author Joel Gertner discussed What Will Alphabet Be When It Grows Up?. In this discussion, in addition to identifying the most important key to Alphabet’s future success, reference is also made to the 11-year-old document that was part of Google’s IPO. The insights from the MIT review are applicable for not just technology businesses; the accounting profession can also draw parallels from them. Here they are:
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CPA firm success requires an effective commercialization strategy.
The boundary of effective commercialization cannot be the number of hours available in a day. When work is limited to time available, you are not able to help many more people who deserve your knowledge, wisdom, experience and expertise. Hence, a strategy that optimally commercializes that knowledge, wisdom, experience and expertise needs to be central to all your decisions, processes, procedures, technology and everything else you do.
Think of it this way: There are hundreds and thousands of people (whom you are not serving yet) who are asking you a question:
“Excuse me! May I rent your brain?”
A firm structure should be designed to protect interests of clients.
Succession can’t be just focused on better valuations for M&A purposes or to replace retirees. Those are not the objectives. Those are tools to protect the interests of clients.
But what about firm structure design?
One way to design the structure of a firm to protect the interests of clients is to ensure that there are no single points of failure in the knowledge and processes required to serve those clients. The first step – if not already done – is to have your firm’s internal processes, procedures and documentation capture everything that is currently only in the heads of those who serve your clients. Assign a primary and a secondary responsible person for each.
Develop services that improve the lives of people.
People always want to pay as little as possible for mandatory compliance services. It is the cost of existence. Helping people comply in time might reduce their stress but that’s just bringing the status to zero level. It does not necessarily improve their lives.
When you develop services with the intent of improving the lives of people, you focus on the long-term why, not just the how – that is why and how you do what you do.
As an investor, place potentially risky long-term bets on the team.
As part of the leadership team of your firm, you are essentially an investor in your firm’s future, whether you invest capital, time, knowledge, experience or some combinations thereof.
- the resources your firm will use,
- the technology your firm will use,
- the niches your firm will specialize in or
- the specific expertise that your firm might have,
the biggest risk will be the people who utilize those resources to produce and deliver your firm’s services.
When you allow, enable, empower and inspire your team to achieve higher performance, you are making a potentially risky long-term bet on the team.
This is because you might not be sure if the team can develop into performers or whether they will jump ship. But if it works out in the long term, they will have their hearts and souls invested in your firm. When that happens, the results will be extraordinary.