Many factors contribute to the constant change in the accounting profession: technological innovation, evolving regulations and standards, and, yes, our current global pandemic. It is especially important for CPA firms to be prepared for change and be ready to manage it when the need for evolution comes. To discuss how best to handle change, we reached out to “The Radical CPA” Jody Padar, vice president of strategy at Botkeeper.

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By: Bill Hayes, Pennsylvania CPA Journal Managing Editor

Podcast Transcript

Whether it's due to technology innovation, evolving regulations and standards, or even a global pandemic, change is a constant force in the accounting profession. Therefore, it's important for CPA firms to be prepared for change and be ready to manage it when it becomes clear that they need to develop with the times. Today we are joined by “The Radical CPA,” Jody Padar, vice president of strategy at Botkeeper.

What sort of changes would you say the accounting world and accounting firms are going through right now? What are they currently dealing with and what are they heading toward becoming?

[Padar] Wow. What issues aren't they dealing with today? I think that is the better question. But, no really, there's just so much happening with audit automation and digitization of everything, and firms have to go through the digital transformation, and that's bigger than just the technology. I think a lot of times we think, oh, we're going to implement this technology and that's going to solve our problem, but, in reality, where technology is today, really every business is a technology company, and that means that we really have to rethink our business model as a CPA firm and what does that look like. So that means not only do we have to worry about implementing the technology, but then we also have to think about what else are we going to change. Are we going to change our processes? Are we going to have to change our pricing? Are we going to have to change the way we serve our clients via remote? COVID pushed us into that. So, there's so much change going on.

I think a lot of CPAs sometimes get overwhelmed with it. On the other side of it, it's so exciting because if you think about all the change that's happening, it's going to allow us to work less. Because when you automate things now we don't have to be there 65 hours a week, which to me is really the cool stuff about all the change that's coming in the profession. I think, too, a lot of people are a little bit concerned about taking our jobs and the technologies with artificial intelligence and machine learning. I think there's been a little bit of a scariness there. On the other side of it, it's like we can't even find CPAs to do the work that we have to do today. How many CPAs have a hard time finding talent and finding people to do the work? From that perspective, it's really exciting because now it's like, okay, we have automation to come in and help us do that work so that we can continue to grow our firms and continue to really serve our customers the way they want to be with advisory services and really help them. Because I think most CPAs, if you ask them what they do, they say they help their clients. That's what we want to do. All this automation and stuff just gives us more opportunity to do that.

When a CPA firm is looking to go through significant change, how important is it for the tone at the top to match the rest of the organization?

[Padar] Well, so it all starts from leadership. You really need to make sure that if you're the managing partner, or you're the partner group in charge, that you are buying into the change, but also not just if you're purchasing technology, but also you're willing to put the labor around it as well. A lot of times partners will buy technology, but then they don't want to give their team time to actually implement the technology or to actually do all the other change work that happens with it. That's really a disservice because then what happens is everybody gets frustrated. Everyone's like, "Oh, it's failed, it didn't work." But really when you're thinking about change, and I'll start with the technology piece because it seems like that's the piece that pushes all the other change, that you have to remember that leadership has to be fully on board with it, but they also have to be open to allowing the team to put labor toward it as well. So it's not just the purchase of technology, you really need people to help change the process and to help figure out what that business model is going to look around it, and all the other things that need to change in your firm, and that only comes if your partners are on board and aren't bothering you with client work.

I say that because everyone says that they want it to happen and they're going to support it, but then something happens and client work comes in and then that manager gets pulled away from doing the change implementation and they get pulled on to client work. Then again, it gets sidestepped, and then the manager's frustrated, the partner's frustrated, and it doesn't work. You really need to not just say that you're in it, you really have to do the things that show that you're on board with it, and really allow for it to happen. It's not just what you're talking about. It’s your actions as well.

These questions are based on a piece that you did for Accounting Today, so certainly a great piece there, everyone should go out and find it. What does it mean for CPA firms managing change to "get past the idea stage and focus on execution more?" What does that entail?

[Padar] I think, again, it's like everybody says we want to change or we're going to change this, but how do we get started? I think CPAs get caught in the getting started. Because they want to know how everything's going to look at the end, but with a lot of this change stuff, you're not going to know what it's going to look like at the end, you’ve just got to take one step forward and get a little bit further and then take another step and get a little bit further, and soon you'll start to see how it's all coming together. I think it's in a CPA's DNA to want to see all of it from start to finish, and in reality it's not going to be like that. You have to be able to get comfortable with just starting to execute and saying, “Okay, I have an idea and let's just execute now and we'll make adjustments as we move,” but not to get paralyzed by “I don't have the checklist of how to get to the end.”

The piece you did for Accounting Today talks about two roles being important in change management. Those roles are the champion and the super-user. Can you tell us a little bit about those roles and what their responsibilities would be?

[Padar] When you're thinking about a champion, that's probably a manager who loves the idea, has a little bit of clout within the organization, who can actually get leadership on board and also get the team on board, so they're in the middle. They're going to make sure that, if they don't have a seat at the partner table, that there's a partner there who is endorsing them to make sure that this initiative is actually going to make it to the end. But that champion typically isn't the person in the weeds, and that person in the weeds is really the super-user. That's usually, I'll say, someone who's younger. When I say younger, it's because traditionally they're in maybe a senior role or they're a team member, and they're the one who loves the task. They're the one who knows every button to click, every way that it works. That's the person who is going to be the hands-on teacher, and typically that person is going to help with the training and help facilitate it. That person usually doesn't have the clout within the organization to actually push the change across the organization.

That's why you need two. If you try and put a team member and make them a champion, just because they're the best person who ... they figured out the technology and they know it the best, and you try to make them the champions, chances are that's not going to help your change initiative because they don't have enough clout within the organization to actually get it to work, to get it across the organization. That's why you really need two people. You need that person who really is in the detail, and then you need the person who really is going to be the connection to leadership to make sure that it doesn't fall off the initiative agenda or get pushed to the bottom so that everything else becomes priority on top of it.

What role do you think COVID-19 has played in driving change? I always feel a bit weird asking these questions because of the very real human toll it's had on people, of course, but have there been benefits in a way, just from a business sense in some of the things that have happened?

[Padar] I think there's a lot of silver linings in COVID, the first one being that, for all of us who thought we couldn't change, in three weeks most of us were able to go remote and figure it out. If you were one of those firms who said, “well, we can't go remote or we can't change, or our team won't adapt,” well, guess what? We did it, and we did it in three weeks. To me, that's proof to say whatever other change initiative we have, we're going to have more than three weeks to get it accomplished. Let's celebrate and say our team actually can adapt and our team can survive. Thinking of all the other things that were happening at that time, it wasn't even just three weeks, it was three weeks with crazy stress, and yet most firms were able to figure out how to get it done and how to serve their clients while they were doing it.

I think that's a win for us as firms to say, “Look, we were really successful at that. Sure, we didn't do perfect, but we've learned a lot, and we were able to do it.” And to remember that as we go through any other intentional change initiative, be like, “Hey, we can do this, we're capable of doing it.” Then on the other side of it, whatever “going back” looks like, so we still don't know what going back to work looks like, with the vaccine, without the vaccine, all of that stuff, but we do know that remote work is really here to stay, and how are we going to get intentional about really making sure that it becomes part of our firms?

What that means is the technology's always been here, but I think firms have not necessarily embraced it, and now COVID really pushed the acceleration of technology adoption forward. I love tech. I'm that tech-forward person. For me, it's exciting because it's like all these firms who were maybe a little bit slower to adapt the technology now have adopted it and are getting used to it. They're seeing that they can do it, and now it's really about let's get intentional about where we want to take our firms and how we want them to evolve in this new world, whatever this new world looks like. The one thing it has really done for us too is it's really showed that geography has no boundaries. So you can have a remote firm, and you can see clients who are other places, because we've proven that clients will use Zoom to meet and they can work remotely. That means that if we were a small firm, we can have clients all over the country, all over the world, and really compete against other firms that are local. You're no longer limited to only serving clients in your backyard, you now really have the ability to market yourself bigger online, and to serve those clients all over the country.

What would be some of the practical advice you would give leaders who are interested in driving significant change within their organizations? How can they get that done?

[Padar] I think one of my favorite change management theories or practical applications is to find that naysayer and put them on the committee. The reason I say that is because if that person has every roadblock and you can get him on board or her on board, then you can move your organization. I think a lot of times people avoid that person because they don't want to deal with it. But I think a lot of times it's easier to deal with that personality at the beginning of the process than in the middle or the end. If you can get that naysayer on board, then you can have him or her help design how this change process is going to work. You're going to find all those objections right away, as opposed to getting halfway in and then realizing there's objection.

The other thing I think it does is everybody knows that personality, and they know that personality is that naysayer. When they see that person on board, it's like, “Well, if so-and-so is on board, then I'll get on board too.” I think that's one of my favorite practical things. I think the other thing is just to be open to change that is bigger than you think it is when it starts. Again, if I go back to implementing a technology, it’s realizing that the technology is not just the change of the process around the technology, it's around everything else in your firm that revolves around practice management. Those things are going to be the differentiators for you in the future of really becoming that forward-thinking and evolving firm versus just someone who adopted technology and changed with it. It's like, do you want to be the progressive and the leading person? Or do you want to just be the person who is accepting things where they're at? To me, I'm the leader, and I think that if CPAs were aware of that as being really an opportunity, that they would get more engaged in the change management piece, because it actually makes them more profitable, and I think that at the end of the day, we want to be profitable. Why are we in business if we're not going to be profitable?