A Long-Term Investment:The CPA Firm Retreat

CPA Journal Interview

By Tom Morris

In Brief

Retreating Can Be a Sign of Strength

Firm retreats have a mixed reputation: Many people view them as an exercise in futility and a waste of time and money. Others use them as a tool for learning what is happening at every level of the organization, improving communications, solving problems, and developing ideas.

When The CPA Journal sat down with Fred E. Shapss, CPA, managing partner of Rosen Seymour Shapss Martin & Co. LLP (RSSM; www.rssmcpa.com), of New York City, and Allan D. Koltin, CPA, president and CEO of PDI Global (www.pdiglobal.com), Koltin had recently facilitated a retreat for RSSM’s nonpartner managers and senior staff. The conversation focused on a best-practices approach to retreats for accounting firms, and how RSSM uses retreats as part of its management plan to maximize its two greatest assets: its clients and its staff.

The CPA Journal: What is the key to a successful firm retreat?
Fred E. Shapss: Using an outside facilitator. Without an independent person to lead the process, the discussion isn’t as free-flowing and it would bias the group. As a practical matter, your goal with a retreat is to learn what other firms are doing: “the best of the best.” If you hire a good outside facilitator, that person will have a wealth of knowledge that he can impart in terms of best practices. If we’re doing something wrong we want to incorporate what other firms are doing better. We don’t just want to talk about how wonderful things are. We start with the idea that things are already terrific, but we want to make them better.

Allan D. Koltin: For a number of years, Fred’s firm had been holding partner retreats. Afterwards, the partners would return all charged up and try to transfer to the staff their new ideas and their enthusiasm about them. Over a series of conversations we developed a novel idea: a staff retreat without partners present.

We had all staff complete a retreat survey that included some tough questions that really opened up communication: Are you happy with the direction of the firm? Are you happy with the leadership? Are you happy with the marketing? What are your biggest complaints? Each person signed the survey and sent it to me. I tabulated them and sent Fred a summary that didn’t include names. If someone had an offensive comment or said something that was clearly trying to take a direct shot at someone, we would have changed the wording to soften the statement, but in this case we didn’t need to do that. When we held the managers retreat, we shared the survey results with the group, going over each question and the responses from themselves and their coworkers.

In this kind of setting, if someone is there whose survey had an unusual response, the facilitator needs to handle it sensitively. So before I display the overhead slide with everyone’s responses to a particular question and 24 people there obviously feel very good about that area and one person clearly doesn’t, rather than embarrass that person by calling on them individually, I’ll talk to them away from the rest of the group. I’ll say something like, “You know, on question 16 your answer was pretty different from everyone else’s. When we get around to talking about that question, we can discuss why you feel that way, but you have to understand that it clearly isn’t a consensus opinion.”

One survey question asks about the firm’s short- and long-term vision; interestingly, this often gets a response that’s split 50/50. On the firm’s short-term vision, people are likely to feel very good, but in the area of long-term vision people are likely to have concerns that are related more to the future of the profession than the future of the firm. With a facilitator, the staff members have an opportunity to talk with someone who has a lot of experience consulting with other accounting firms. They can talk about best practices, and they can hear why during the last five years, after being on autopilot for 100 years, the accounting profession is suddenly in a huge state of confusion.

As an advisor, the facilitator’s role is to articulate what people are feeling but don’t want to talk about. The facilitator can be an objective person who helps them deal with issues objectively. If you hear the same issue discussed in different settings in different words, you can make a good assumption about someone’s concerns or where they may be heading.

I give Fred and his partners lots of credit: Compared to other retreats I’ve done that have been strictly rah-rah sessions to get the staff excited with no real behavioral change, Fred and his firm were willing to expose themselves to the tough questions. The saying “Don’t ask a question you don’t want to hear the answer to” applies here, and Fred and RSSM were definitely not afraid to hear the answers. They’re willing to expose themselves to criticism and genuinely interested in making changes. Re-member, they asked the same questions of the staff that the partners were asked in their survey. When this kind of retreat is over, we meet and discuss changing some things and not changing others.

RSSM’s nonpartner retreat included about 40 senior people: principals, managers, seniors, and others who have been with the firm a long time or have long-term goals. For many of these people, the retreat may have been the first time an outside consultant spoke with them independently of the partners.

Shapss: After the retreat, the firm dealt with the consensus comments that came back. We formed a committee of about seven people at all levels, including people who weren’t at the retreat. The objective was to give the staff information about the issues addressed at the retreat and how the firm is dealing with them.

We found that some questions raised at the retreat and in the office dealt with lack of knowledge. Even though we have an open-door policy at the office, some issues didn’t come up until the retreat. Allan’s presence as an independent facilitator enabled certain issues to come out.

Computers, for example. We use laptops in the field and desktops in the office, and the question was raised, Why not have only laptops with docking stations and phase out the desktop computers? After the retreat, we involved the firm’s technology partner to discuss why we do what we do, and we learned that with the laptops, the issues were financial and security. Desktop units are less expensive, and we want to make sure we have laptops available for fieldwork when they’re needed. Hearing these strong rationales from a peer helped people accept the decision not to change, and everyone was very happy with the result. The lesson was that you may not always agree with someone’s reason for doing something, but knowing the reason makes a big difference. Lack of information is what you want to avoid. You want people to know that the firm isn’t being arbitrary or capricious.

Planning a Retreat

CPAJ: What was the timeline for the retreat, from first phone call between RSSM and Allan, and what were the planning steps?
In this case, four to five months. The logistical details included a date and location. We knew we wanted to avoid tax season, and we chose July because although it isn’t a slow season, it’s more relaxed. We planned far enough in advance so we didn’t conflict with people’s vacation plans.

Koltin: Someone asked me to define what is unique or different about RSSM. I realized that the group doesn’t talk about themselves as individuals; they talk about “we.”

For example, at the retreat one lead manager talked about how money isn’t free and ideas usually have costs. He suggested coming up with a half-dozen well-balanced ideas that make business sense. It reminded me of the old adage about needing to work on the business rather than in the business. I think this exercise—developing new business ideas—was refreshing for people who don’t normally play the role of working on the business.

At this retreat you could also see the adage of “You don’t know what you don’t know” at work. The first couple of hours, you could see the group dynamic working and leaders evolving, with some initial tentativeness out of concern about saying something controversial that firm partners wouldn’t like. But gradually they opened up and after a couple of hours, after they gained confidence in the process and decided to make it worth their time, you could see the focus become more positive.

Shapss: One idea that came out of the nonpartner retreat was a monthly town-hall meeting with the entire staff. This meeting is an opportunity to praise certain individuals or departments, because many people wanted a better process for acknowledging who does a good job. Because the firm is large [RSSM currently has approximately 160 staff total], planning anything that involves the entire staff takes time. The town-hall meeting is also a way to address things circulating in the rumor mill.

CPAJ: What resources does a company need for a retreat?
A lot more is involved than the time and expense of the retreat itself. One manager at the RSSM retreat said, to get people focused, “Let’s not forget the cost that the partners are investing in us here. Not only food and the meeting room, but 16 man-hours for each person present, plus our pre-retreat reading and other preparation. We owe them something back.”

Shapss: A 20-hour commitment per person times 40 people in the room equals 800 hours. When they multiplied that by an average hourly billing rate of $150 they saw that the firm was making a $120,000 investment. That got people’s attention; they said, “This is an enormous commitment, so let’s make the best of it.”

CPAJ: How many of the top 100 CPA firms would make that kind of investment?
If you don’t include what is now the Big Four, I think you could count on one hand how many of the top 100 firms would make a comparable investment. Either they would say they don’t have any problems, or behind closed doors they would say they think they know what their problems are but they aren’t going to change: “We’ll do what we want regardless, so why bother?”

Some firms have just chosen not to connect with the current generation of people, harking back to the days when staff just lined up and did what they were told.

Shapss: Our feeling is that we have two assets: people and clients. And they’re mutually dependent—we can’t have one without the other. We can have the best people but without clients we can’t keep them, and vice versa. I constantly hear from new clients, “We got tired of the revolving door of people servicing our account and we got tired of training new people.”

The costs connected with staff turnover include agency fees and retraining. During one recent year, we had zero resignations, so for that year we saved those costs and our human resources manager was able to get other things done.

Koltin: You get out of a retreat what you put into it. Firms that don’t want to do retreats have a certain amount of arrogance. Most managing partners will just hold an annual partner retreat and prepare for that by sending the other partners an e-mail the week before asking for them to respond with any ideas or complaints they’d like to discuss. So what they get is a five-minute response with no cost, but they get a lower-quality result as well. So what does that say to the staff?

Making Retreats Successful and Following Through

CPAJ: Can you talk about some of the exercises you did at the RSSM retreat?
Toward the end of the second day I asked each person to talk about the best idea they got for themselves and for the firm. We closed with each person completing the sentence, “I’m proud to be affiliated with RSSM because—” and reading it in front of the group. One fun exercise was for everyone to fill out a personal survey. Then we circulated and shared them, but without individuals’ names. The result was a lot of interesting sharing because people learned things they didn’t know about each other.

CPAJ: What are the choices in terms of retreat structure or in follow-through after a retreat, and what types of things can happen?
A follow-through approach that works well is for a group of participants to review the output with a group of the firm’s partners about a week after the retreat.

Shapss: As a result of the retreat output our firm redesigned our mentoring program, which we’d only been giving lip-service to. There wasn’t resistance; there just wasn’t an impetus to do it.

Koltin: The group at the retreat talked about mentoring being something that not everyone wanted or that wasn’t appropriate for certain phases of an individual’s career path. We identified three types of people: those who want job security, and are happy as long as they’re paid fairly; and those that want mentoring but choose not to sacrifice their family life for career advancement. Then there are high-energy performers who want the best mentoring they can get. When it comes to the mentors themselves, not all partners are good at mentoring. Our approach was to not force people into something that their hearts wouldn’t be in. Ergo, selective mentoring, which means it’s there for those who want it. Because fewer people are involved, those that want to be mentored will be exposed to better coaches.

Shapss: To match mentors and mentorees, the human resources director listed everyone interested, then sat down with several partners to discuss matching personalities, work-styles, and other factors.

CPAJ: How many committees are working on retreat-related projects?
There is one committee, and it meets with me every four to six weeks to discuss ideas coming out of the retreat. One idea, that the staff needs feedback to keep them in the loop, is the basis of my monthly town-hall meetings.

CPAJ: Why are the town-hall meetings important?
In general, people recognize that information from a managing partner will be more reliable than rumor. When it comes to things like mergers and acquisitions, I tell our staff what I can, although obviously confidentiality is sometimes an issue. For example, I may say that we’re in merger discussions with a small New Jersey firm. A deal is on the table that may or may not happen and may need several months of negotiation.

In general, I give them firm-wide updates every four to six weeks and they can tell me what’s on their minds. After September 11, I got asked about security, which I wouldn’t have expected.

Koltin: With this kind of forum, employees aren’t walking around feeling scared, because they have a means to ask questions and get educated. Even when they hear about possible mergers that can’t be discussed in detail, they’re empowered because they’re part of the process and have some control. They have a sense that the employer is thinking about their welfare.

When people ask what value that has, I tell them it has value because something like an office lease is a big financial decision that has a lot to do with what you want the firm to look like X years from today. A firm grows through mergers, organic growth, or both, and the people at the town-hall meeting will help drive the organic growth. I think they understand signing a lease is a financial and strategic decision. If you were having that kind of conversation with a client, wouldn’t you talk about the client’s growth plan and space needs?

CPAJ: What about telling people that some ideas just won’t happen short-term or long-term? Can you give examples?
At RSSM the concept of a four-day workweek has come up.

Shapss: The five-day workweek isn’t sacrosanct but our firm isn’t ready for it yet. I think this was a wish-list item from the retreat rather than a deal-breaker. The staff wanted to get it on the table in discussion with the partners and move in that direction.

Some ideas in the areas of marketing, like a client appreciation night, we discussed and decided weren’t a good idea in general. We discussed how clients refer business and we show them our appreciation in different ways and they don’t need a client appreciation night. We grow by client referrals, and if we’re doing a good job we’ll get them. If referrals slow down or stop, we’ll examine what’s changed and why.

CPAJ: You mentioned a four-day workweek; did the retreat get the partners to talk about how the firm manages flextime?
During a previous summer we’d implemented a summer hours program that worked out well, where half the staff left around 2 p.m. on alternating Fridays, so every other week your weekend was a few hours longer. So we’re open to change. Yesterday, I stopped by the office at 7:15 a.m. before going to a conference and people were already working. We have a lot of good people; they go about their jobs. We let them know we appreciate it.

Evaluating Success

CPAJ: How have retreats changed over time?
So much is happening today that firms are forced to think strategically. Today you really need to manage and lead the firm and if you don’t, you die. Many firms used to have the philosophy that they didn’t have to grow. I’ve learned if a firm doesn’t grow and create opportunities for its top talent, those people will leave. On the plus side, I see more partners behaving more like business owners than tradesmen, which means they’re working on growing the business.

Shapss: At a lot of firm retreats today, they’re talking about choosing which products and services are best for the firm because they know they can’t be all things to all clients. They are asking themselves: Where do we want to grow, where is our client base, and how is it changing?—and then changing their behavior based on the answers they come up with. The worst thing you can do is not act on input from a retreat. When you do that your strategic plan begins to go off course, plus you lose credibility with the staff.

CPAJ: How do you measure a retreat’s success?
Most of the success is intangible, but one of the significant tangibles we’re seeing is low or no resignations.

Koltin: A firm with low or no turnover is mind-boggling when you think in terms of industry trends. The cost of replacing a CPA is estimated at $75,000 when you factor in things like downtime, search fees, retraining, and lost productivity. If a retreat is all it takes to retain someone, terrific; plus, the firm and the individual get other benefits as well.

Shapss: Our firm also gets cross-selling ideas, and the camaraderie boosts productivity. You need to feel good about yourself coming to work. I don’t know how our absenteeism statistics compare to national trends in accounting firms or in general, but if we thought we had an absentee problem we’d be monitoring and analyzing it.

CPAJ: What’s your advice to firms considering a retreat for the first time?
Hire a good professional to run it. You can’t do it yourself.

Koltin: Be willing to listen to what people tell you and be willing to be held accountable for the decisions made as a result. This isn’t a one-time fix. This is an opportunity to participate in organizational behavioral change on a long-term basis.

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