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Hindsight of 2020: Professional services firms and lessons learned
December 22, 2020
Authored by RSM Canada LLP
John Greenidge shared this article
INSIGHT ARTICLE |
We have heard from many leaders at professional services firms (be it CPA, legal or engineering firms) that despite the initial reactions, layoffs and deferred distributions, 2020 has accelerated the reinvention of their entire business model.
As we look toward a long winter of virus resurgence, many firms are leveraging lessons from the past six months to continue the reinvention of four key areas: culture and diversity, talent experience, client experience and operational agility.
Culture and diversity
It is impossible to have a conversation about culture without recognizing the importance of diversity. High-performing firms have not only embedded diversity in their teams but continue to make it a high priority among firm leadership. Evidencing that an investment in diversity equates to an increased ability to attract talent, drive innovation and elevate financial performance.
David Hamel, author of “Humanocracy: Creating Organizations as Amazing as the People Inside Them,” discusses the need to shift from a top-down approach to a power distribution model in order to amplify collaboration, autonomy and leverage the genius already present in firms. For professional services firms, this year provides a great opportunity to re-imagine the management models to enhance the talent experience by engaging teams to do the things they can’t do by themselves.
Clients continue to be the centre of strategy at many high-performing firms. Due to the pandemic, clients are buying services largely through digital interactions, and they will continue to expect digitally accessible experiences. As clients continue to demand tailored solutions for their individual needs at price points determined by value received, firms are becoming more focused on their client specializations and have built formalized ecosystems to broaden the available solutions (as demonstrated in RSM Canada’s own alliance program).
Other long-term effects of COVID-19 on the client experience manifest in leadership transitions. In our client conversations, we heard many senior leaders asking themselves, “Do we want to come back to the new normal—whatever that will be?” and they are contemplating early retirement. When people retire, they take with them three significant assets: their relationships and trust built up with clients, their knowledge about their clients’ affairs, and the revenue attached to those two assets. As such, building a culture that supports succession planning is critical.
COVID-19 has magnified the use of the word “agility.” Whether referencing strategic agility, digital agility, enterprise agility, organizational agility, it all comes down to the same thing: doing things better and faster with less.
Operationally, high-performing firms are taking advantage of the disruptive opportunity to transform their digital footprint. Recognizing the cost of inaction, firms are focused on all things technology, including data collection, storage and retention integration of the entire digital platform, and the protection of that infrastructure against cyberthreats.
In fact, according to the 2020 NetDiligence Cyber Claim Study, sponsored by RSM US, the professional services sector (i.e., law firms, accounting firms, architectural firms, etc.) was the second-most common target of cyber attackers from 2015 to 2019, suffering over one-fifth (21 per cent) of reported incidents, slightly less than the health care sector at 28 per cent. Positioning themselves for the future, high-performing firms are investing financially and with effort to enable agility.
Overall, high-performing professional services firms are finishing 2020 with a mindset to reactivate and re-imagine. Facing exponential complexity, pressure to deliver an experience, they believe “Can will always beat can’t.” Those that can’t reinvent themselves, will be left behind.
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This article was written by Terri Ellis, Michael Nicolo and originally appeared on 2020-12-22 RSM Canada, and is available online at https://rsmcanada.com/what-we-do/industries/business-and-professional-services/hindsight-of-2020-professional-services-firms-and-lessons.html.
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