A Partner’s POV on Accounting Firm Culture Change

In 2012, Stephen D. Mayer left the successful CPA firm he had co-founded more than 25 years earlier to start over again from scratch. He wanted to build a holistic advisory firm in which his staff shared in the profits and which provided clients with financial advisory service throughout their lives. At SD Mayer, he says he’s achieved both — and much more. Stephen provided insight on how his accounting firm has embraced – and how others should – culture change in an evolving industry and marketplace for the Winter 2020 issue of Growth Strategies, to be published in early December, and offered the following additional thoughts:

On the accounting firm culture change to becoming full-service:

I started my career at Coopers & Lybrand in its Emerging Business Group. We worked with start-ups and went beyond accounting and tax services to help with all aspects of their business—banking, contracts, law, technology, estate planning and more. It was a holistic approach with a team of people with multi-faceted talent—they could do bookkeeping, banking, estate planning, tax, and accounting. A typical accountant can only do one or two things. They don’t like treading water when they can’t see the bottom of the pool. We were more like the Navy SEALS, with many talents and skills to get the job done. I loved it and thought it was the best approach to serving business owners.

On empowering young people (alternate version of the quote in story):

We hire tons of really young people and they don’t just sit around. We throw them in to do complicated tasks and it’s amazing how quickly they learn. For all the talk about how complicated what we do is, it’s really just 1+1. The likability concept is more important. Do clients like them? I have hundreds of clients and can’t keep up with them all, so the only way I can be successful is to have people who get engaged and care. Otherwise, it’s like having a baseball team and not letting them throw the ball.

On millennials impact on Accounting Firm Culture Change:

I think millennials work their asses off. They just work differently. They aren’t interested in 8 to 5, don’t want bureaucracy, want to work efficiently and not waste time. They can research and solve problems much quicker. Partners have the experience, relationships, and work hard. Millennials think, “If I can accomplish as much as you in less time, isn’t that better?” I say, “Yeah!”

On hiring people from diverse backgrounds:

I’m an Irish Catholic kid and my dad was a cop. I know that immigrants are hard workers. More than 50% of our staff were not born in the United States. It’s a totally different world now. They work hard to get to the same spot my kids are. Their degree might not be from a prestigious college, but they have what it takes to succeed. Their language might not be the greatest, but when you’re reading financial statements, you can’t tell. They have a phenomenal work ethic.  Hiring people from diverse backgrounds has been instrumental in the growth of our accounting firm culture change as we continue to evolve in the industry.

We hire lots of interns, four or five each year, and we keep them engaged with challenging projects. Over the years, I have hired kids from my own neighborhood—kids I’ve coached. In all that time, only one has been a “zero.” We want to work with smart kids who are motivated, regardless of their background. In fact, we hired my son’s college roommate, who is an engineer and knew nothing about accounting, but knew a lot about process improvement. After two years, he’s now the COO and he’s all over the firm tracking everything. You have to have the right people on the right seat on the bus like Jim Collins writes in “Good to Great.”

On teaching and experience vs. rules and penalties:

My son and I have gone backpacking with three other dads and their boys every year since he was nine. We just got back from our 30th backpacking trip. In all that time we’ve never had a major injury or lost someone overnight. At a barbecue before our first trip, many of the moms worried about how we would keep the kids safe. I’m not a rules person, so I improvised and told them everything would be fine as long as the kids followed two rules: brush your teeth at least once a day and wash your hands after using the bathroom. There was dead silence. Of course, there were things we all had to learn and be aware of, but my plan with the boys, much like my approach within my firm, was not to micromanage them. We showed them what to do, shared our expectations, gave them freedom and responsibility, and trusted that they would learn to solve problems with confidence.

When they were 15 or 16, the boys, now experienced backpackers, asked to hike ahead of us on their own. We agreed and showed them a trail junction on the map where we’d meet. When we got to the trail crossing hours (and miles) later, the boys weren’t there. There had been a lot of snow the previous winter and parts of the trail were still snow-covered. We figured the boys had lost sight of the trail at some point and may have followed another path by mistake. Being lost in the wilderness after dark and a long day of hiking was not a good thing. The dads went over our map and found where they had most likely gotten lost, about eight miles back up the mountain. Two of us grabbed water and food for a few days and set out in the dusk to find them. Long after dark, guided by headlamps, we found them where we thought they’d be. They’d made a fire and were sitting around it waiting for us.

“When we realized we had messed up,” one said, “We knew we should stop, stay next to the trail, set up camp and wait for you. It was no big deal. You taught us what to do, we did it and we knew you would come.”

One of my favorite things to say is “Ask for forgiveness, not permission.” I don’t make rules. I want my staff to feel empowered to make decisions and get stuff done. I’m always available to hear the ideas or provide advice, but in the end, I need people who aren’t afraid to make decisions.

On his new foundation:

For years, I have used a beach analogy with clients to help them understand the importance of financial planning. Eventually, I self-published a short book—“5 Buckets, 4 Shovels, a Beach and a Map: A Guide to Financial Security”—to share with them. In the analogy, the buckets are asset classes: insurance, liquid, retirement, personal and investments. The shovels are your advisors: CPA, attorney, investment advisor, insurance. The beach is a metaphor for your life, with sand representing your money and the map is your plan for getting what you want in life. The shovels help you fill your asset buckets at the appropriate time as you move along the map to ensure you have what you need to get where you’re going. Clients loved how the simple analogy helped them understand the complex topic. Everyone who read the book would say they wished they had had something like this when they were young, and many told us they had shared it with their kids.

As a wealth advisor, I was surprised to learn that the average score on a financial literacy test taken by young adults was a disappointing 58%. I have always wanted to make a difference with my firm so, with this statistic and clients’ feedback in mind, we formed The 5 Bucket 4 Shovel Foundation to educate young people on the basics of financial literacy. Our goal is to reduce poverty, boost the economy and decrease wealth inequality. We have just published a second book called “Adulting 101: A Guide to Personal Finance.” It goes through the basics of personal finance—the basics of filing taxes, reading a paycheck, budgeting, loans and more—that most aren’t learning in high school.

The foundation is launching a nationwide marketing campaign to distribute one million copies of the book free to high school and college students. We hope other accounting firms will want to help. Firms can purchase and co-brand the books and we’ll train them to teach the financial concepts in the books at schools in their communities. The local partner firms will raise awareness for their brand and all proceeds from book sales will go straight back to the foundation. For every book purchased, we’ll give two more away.

On why a client gave his foundation $50k:

We recently did a special project for a client in another state. He came to our office for a meeting and as he was leaving, he saw one of my books. He asked about it, so I told him why I wrote it, about the new foundation, and gave him copies of the books as gifts. He called a while later to say he had read them on the plane ride back home, though they were great and wanted five more copies. I said I’d be happy to sell them to him because the foundation was raising money to give more books away. He agreed to $200 and asked if I minded if he sent a little more to support our work. Two days later I got a check for $50,000! It’s stuff like that that motivates me to keep going.

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