It immobilizes our firms’ leadership to respond to the upcoming people drought and hinders our ability to rapidly change outdated, ineffective client service delivery models.

Why the urgency around culture, don’t most firms recognize the need to change and are changing some things?

The rising team member turnover rate in our profession is threatening our ability to remain relevant. We cannot run the risk of being an unattractive career option for future talent and generations. The solution requires bold, quick changes in how we work. We cannot afford to be mired down with our present day cultural quicksand. We now compete in a talent market that closely resembles free agency in the sports world. Accountants, like athletes, move often and quickly.

Baby boomers will remember a time when almost every action movie involved the hero or villain becoming mired in quicksand, sinking away ever so slowly, until only their hat remained. My favorite was the vine-

swinging Tarzan who always seemed to find quicksand. Contrary to what Hollywood or folklore would have you believe, it is actually impossible to drown in quicksand, although it is very difficult to escape.

The culture in public accounting, at least the culture extant in most firms, is like a pit of quicksand largely due to our enormous successes of the past. Success is anchored in mainstay beliefs of how we have previously worked, revenue engines fueled by time, and top down communication. Due to these long-held beliefs and inherent bias from our experience in past successes, we are presented with unique, hidden challenges. If these challenges go unmet, they will make the impact of our looming people drought much more severe.

First, we must acknowledge that the people drought is real and not hidden. The numbers alone indicate problems for succession. Our succession cliff involves 75 million Baby Boomers followed by 50 million Generation Xers who will all be challenged by 78 million Millennials. Add the impact of Baby Boomers taking early retirement or choosing other retirement careers and the numbers themselves are a scary transformation for our profession. The AICPA is reporting higher turnover rates for our profession. Can we bear the risk that future generations will not see our profession as a career choice or that they flee faster than they do today?

It’s easy to see our footing is going to be mushy at best when by 2016, many CPA firms will be composed of 75 percent Millenials. 2016 is not far off, requiring understanding of the quicksand effect of our present culture.

I believe we can (and should) have a bright future in a profession that the world still views as prominent, trustworthy, relevant and visionary. I also believe we can provide career opportunities that are pursued as one of the best by the coming generations. In addition to the looming people drought, we also need to take a hard look at five hidden challenges that are impacting our ability to attract the best talent for our profession:

• Leadership void• Bad logic • Seeing is believing• Time stinks• Heart matters

CULTURAL QUICKSANDFIVE HIDDEN CHALLENGES THAT ARE KILLING OUR PROFESSIONBy Joey Havens, CPA, Executive Partner HORNE LLP

THE PRESENT DAY WORK CULTURE WITHIN CPA FIRMS AND PUBLIC ACCOUNTING IS EERILY

SIMILAR TO QUICKSAND.

ARTICLE 2 IN A 3-PART SERIES

LEADERSHIP VOIDOur present day culture in public accounting has not provided us with many firms that are exceptional at leadership development. Partners (for the most part), got it on their own— and therefore have not developed the skills or organizations that excel in leadership development.

This cultural quicksand immobilizes so many leadership development initiatives. Our leaders don’t know how to develop other leaders. This seems to be an unspoken disconnect (hidden quicksand) in firms, but it visibly slows our ability to transition into excellent leadership development organizations quickly enough.

The Deloitte Global Human Capital Trends 2014 report identified the single biggest challenge cited by 86 percent of respondents is leadership development, followed by retention and engagement at 79 percent. The profession has developed many great leaders at this point in history, but we are slipping in our ability to quickly lead the way in leadership development for the newest generation. With a Millennial generation that has been raised on 24/7 connectedness, social media communication and values that reflect life and flexibility choices over work—if we don’t develop them, we will lose them.

BAD LOGIC Perhaps you too frequently hear comments similar to these in your firm or at other meetings within the profession. I know I have. “Surely, everyone wants to enjoy the income and security we have in public accounting. We have always had enough team members who get it. You have to expect turnover in public accounting. Our older team members will work longer. Millennials lack work ethic. There is nothing wrong with our firm. We already have flexibility. Our seniors and mangers love it here, they are not at risk.” This is all bad logic and bad logic leads to bad words and actions.

The findings of “PWC’s’ NextGen: A Global Generational Study”1 reveals that Millennials do not view our profession as “worth the sacrifice.” It further states, potential for substantial compensation later on does not change this view.

As Stew Friedman, professor at Wharton and author of “Baby Bust,” reported in his study of college graduates, 2012 graduates surveyed planned to work an average of 72 hours a week compared to 1992 graduates surveyed who planned to work an average of 58 hours. Simply stated, the new generation doesn’t expect to work less. They just expect to work differently. It is not about their work ethic, it’s more about work style, which likely includes being connected and working at unconventional times.

In a white paper on CPA firm leadership, the CPA Consultants’ Alliance documents2 the risk of a people drought and the potential for more turnover in our experienced staff.

The findings defy the mainstays of our past logic on keeping our share of future talent in the profession. Is this logic more prevalent than we want to admit? It’s no surprise to find these kinds of statements in succession planning discussions in most firms. Since this bad logic often goes unchallenged, this hidden quicksand impedes the effectiveness and speed of people initiatives.

SEEING IS BELIEVING Firms and partners are slowly understanding the need and challenge to change how we work. There are many great policies in place that demonstrate efforts to change our present day culture by changing how we work. Programs for flexibility and ability to work remotely are in place but they are not the norm. The hidden quicksand is that people believe what they see, not what they hear or read. Far too often, the unspoken truth is that people feel guilty about participating in such programs. This guilt is mostly hidden even though it exists in most firms. I refer to this dilemma as the guilt vampires. The guilt vampires influence people’s decisions.

1http://www.pwc.com/gx/en/hr-management-services/publications/nextgen-study.jhtml2 http://cpaconsultantsalliance.com/resources/communicationdrivesnewpossibilities

PART 2: CULTURAL QUICKSAND

PAGE 2

OUR LEADERS DON’T KNOW

HOW TO DEVELOP OTHER

LEADERS.

People are not changing how they work, nor do they believe they can, because the vast majority of partners and managers are working just like they always have. They have not changed their work habits at all. Unfortunately, partners and managers also manage people just like they always have despite the preponderance of “new policy or views on culture.”

The common culture today is reflective of the mainstays of public accounting that insist on a command and control approach for managing people and work. The “mainstay” view is that time and presence are the main indicators of commitment, value and potential. The view that work is closely aligned with a place (or location) dilutes the creativity, flexibility and innovative spirit of today’s Millennials. Individual contribution, professional growth, value and engagement are marginalized in the minds of today’s “best and brightest” as they enter the profession.

The bottom line is young accountants will not continue to show up if we continue to work how we are currently working!

TIME STINKSOur profession and the economic engines of almost all CPA firms are built on the chargeable hour (time). Creating a vibrant firm culture requires that we understand value (worth) and value individual contributions versus the time they report or incur to complete a project or task. In fact, valuing time leads to a mindset of the status quo for how we work.

The hidden quicksand is that time plus presence has never assured productivity or value. I’ve commented more than once that some of the people that I had to “coach out of the profession” were the most chargeable of them all. They understood the time sheet game, but the results were not there.

What does time really have to do with the value of our services? This debate has been going on for years, yet it has not been well received in most firms because the design of our revenue engines and protection of the status quo.

Just for a second, let’s discard the primary debate of time equals value. How is our culture impacted by having young professionals track all of their time? What about the enormous and untracked expense due to turnover from entrepreneurial professionals who clearly see this disconnect?

Time sheets have become a crutch for managing people and this is killing our ability to grow leaders fast enough. It has also contributed to the deficit in leadership development skills that now exists. Today’s technology, information, collaboration and connectivity make time even less important and forces us to consider our value in the customers eyes based on results rather than on a time sheet. Time stinks as we try to move our cultures forward and we need to search for ways to avoid this quicksand.

HEART MATTERSQuicksand has four components: sand, water, clay and salt. Every firm’s quicksand is a different mixture, creating its own unique pull and thickness. When I think about the salt in quicksand, it reminds me of how many firms have drifted away from being emotionally connected to their mission and purpose. We know the mission. We are doing the right things. The integrity is there. But what seems to be missing, all too often, is the energy and passion around our purpose and mission. The “I had to learn it on my own” mindset echoes too often in our hallways and adds immobility to our cultural quicksand. A firm’s culture becomes the artifacts of things and policies and in many cases we have created a mentality of “learned helplessness.” The condition that sets in when our people hear the phrase: “We can’t do that because… (fill in the blank).”

The hidden quicksand in this case is that we are spending too much time on the smart aspect of our business (finance, marketing, technology, etc.) and very little time on the human (culture) aspect.

Are we truly leading with our hearts? Can our younger leaders read our hearts and see the transparency they expect as a value? Today, we must help our team members have a better sense of connection and that begins with more

PART 2: CULTURAL QUICKSAND

THE BOTTOM LINE IS YOUNG ACCOUNTANTS

WILL NOT CONTINUE TO

SHOW UP IF WE CONTINUE TO

WORK HOW WE ARE CURRENTLY

WORKING!

PAGE 3

About the Author: Joey Havens, CPA, is the executive partner at HORNE LLP where he leads more than 500 team members on a journey to become the Wise Firm©. He passionately lives out his life’s calling to help others see and reach their full potential. Joey challenges leaders to bold transparency, calling on leaders to show their heart while working to connect everyone to the “why,” or the purpose, of the organization. He is a husband, father, grandfather, avid outdoorsman, and fanatical college sports fan. Follow him on Twitter @JoeyHavensCPA or read his weekly blog at www.blog.horne-llp.com/bebetter.

PART 2: CULTURAL QUICKSAND

transparency and more communication of our purpose, our “why.”

SUMMARYFirms that ignore the need for sweeping changes to create strong cultures will be overtaken by the waves of other firms or simply “die on the vine” for lacking relevance and agility to withstand the speed of this transformation. Firms that understand, see and avoid the present day hidden cultural quicksand will experience an abundance of growth and enduring prosperity.

Tarzan always used a strong vine to free himself of the quicksand. We will also need strong vines. It is past time for us to unpack our beliefs and engage in a real debate on how we will remain relevant for the future. What got us here will not get us where we need to go. Do not let things that slow us down remain hidden.

In the first article of this series, “Who Are We?” I addressed the challenge of knowing who we are as firms. The next article, “Buried in Denial,” provides insights to help us self-diagnose the unconscious denial that is causing us to ignore the obvious, or leads to justifying beliefs that will not succeed in the new order of business.

TARZAN ALWAYS USED A STRONG VINE TO FREE HIMSELF OF THE QUICKSAND.

WE WILL ALSO NEED STRONG VINES. IT IS PAST TIME FOR US TO UNPACK

OUR BELIEFS AND ENGAGE IN A REAL DEBATE ON HOW WE WILL REMAIN

RELEVANT FOR THE FUTURE. WHAT GOT US HERE WILL NOT GET US WHERE WE

NEED TO GO. DO NOT LET THINGS THAT SLOW US DOWN REMAIN HIDDEN.