Are you ready to Grow or Go?

Video Transcript:

Kia ora, Welcome, Good Evening

Thank you for coming out this evening. The first rule in leadership is show up, pretty basic but opportunity and ideas typically come from interaction with people as well as reading and research but nothing happens if you don't show up, so welcome leaders, this is the characteristic of leadership.

My name is Brian Freestone and I am the Sydney connection of Covisory. I want to talk to you briefly about career. Think for a moment where are you in your career, for most people in professional services your business is your career or the business of your employer frames your career. It is usually difficult to separate these so we tend to talk about them as interlinked you are the business and the business is you. At Covisory we like to think of three phases of career in professional services, build, buy or sell and harvest. In our experience with clients this is much the same for law, accounting and so on and they are not always in sequence. I will come back to this theme in a moment but firstly lets think about planning horizons.

We are 20% on the way through the century, what was happening in the last 20% of last century? Lets go back to the future and 1980. In 1980 there were 8 major accounting firms and a myriad of small ones. In fact the Prime Minister at the time was an accountant. There were some career options for accounting and the top personal tax rate at the time was 66c in the dollar, the calculator was king.

So what has happened since then, at Covisory we have focused on four big forces driving change, firstly industry consolidation. The big 8 have become the big 4 and in this process Arthur Anderson was obliterated and many small firms have disappeared. Accounting along with all professional services have become recognised as businesses with different business models being applied. By way of example PWC and the other big 3 have gone down the scale route and here in Australia PWC have annual revenues of some $2.6b per annum.

The second big cause for change is technology. Technology continues to disrupt the way you work and also the future of work for your clients and you and your people. Technology has increasingly become a business within itself. Take Xero founded in Wellington in 2006 its market capitalisation today is over $12b.

Thirdly career roles have changed particularly in the corporate sector. The CFO has become elevated and seen not just as a control function within companies but an integral part of management driving resource allocation. Corporates are poaching talent actively from CA firms, we expect this to continue and finally regulation.

Regulation will continue to impact on the profession as it will on the business economy and society in general.

So the question I wanted to ask of yourself is where I am in my life, my business and my career. Again in professional services you and your professional colleagues are the business so these questions are inter-related.

Lets pick a date 30 June 2025 incidentally it's a Monday where do you want to be? Some questions that will help you focus on this are in three clusters.

Firstly, do you share the same values or philosophy as the people you work with and by this I mean things like work and life balance. The type of work and type of client that the firm attracts and the income levels.

The second cluster is does the practice have a plan and if it is are you committed to it? Is the plan owned by your colleagues and the litmus test do you actually manage performance?

Thirdly, do you have the right mix of people around you ??? as we know talked of finders, binders, minders and grinders but is your firm set up for the future? Is it attracting talented people?

And finally the test, is this actually where you want to be and is this your plan.?

If we stand back and say lets look at planning generally at Covisory we think it is helpful to use a farming analogy when thinking about the inter-linkage between firm and career. I talked before of three phases, build, buy, sell and harvest. Again these are not necessarily sequential. The build stage, what sort of farm are you developing? 20 years ago the decision was often around the dairy or beef farming, today I suspect it is more around silky or firm tofu.

Where is the growth, how are you laying the foundations for the future, is the firm expanding, is the expansion profitable, is the growth appealing to you and are you also pruning the business to grow. The buy or sell phase we like to look at this from the perspective of where value is and how it can be realised. The traditional view of sale is like selling the farm to retire but there are now different options to consider. For example the changing aspirations of Gen X and Gen Y mean that some law firms find salaried partnerships have a higher take up than equity partnership. They don't want to buy in and they may not stay. But they do want to be partners.

Looking objectively at some parts of your practice could some parts of that business be sold to fund growth or have you got idling capacity that organic growth will not easily fill. Working out your business model and how you maximise value is something we can assist you with to determine a sales strategy and time frame that works best for you. The harvest phase free cashflow that you can choose where you invest or spend is one of the most interesting spaces to be. Key life cycle events here relate to family, schools as well as pre and post retirement. Taking cash out of the business should enable you to diversify your interests but not disadvantage the prospects of the firm.

Most people here tonight will have seen clients who have failed to plan. I don't intend to talk about that if planning is something that doesn't come naturally to you talk to us and we can provide some structure. Here at Covisory we work with individuals and firms, for individuals we can offer you a confidential service to help you assess where you are in your career, clarify your goals and determine where your talents are best applied and broadly how to get there. If you know what your value proposition is, if you know what your contribution is it is easy to maximise the value not just for yourself but for the people around you. People who don't know how they add value can be very disruptive in a professional services firm and we have encountered many examples of this. It is helpful to know what you bring, how you apply it and the value from doing it.

For firms we do this at a business level. This includes a practice health check. This is focused around benchmarking, are you doing as well as you think you are doing, the strategy people and structure have you got the right people in the right place doing the right things and is your action plan focused on business growth and profitability, succession and development plans for staff and do you have a recommended sales strategy.

Additionally, we do practice valuations, obviously, we execute business sales and finally, we offer an internal dispute arbitration service.

We hope that you find this evening thought-provoking and engaging and it gives you perspective on your career and your future options for you and your business.

I now hand over to Nigel Smith founder of the Covisory Group. Thank you for your attendance.