By the time Wayne Burson became CEO of BDO USA in 2012—having worked as a partner there since 2001—the 102-year-old accounting and advisory firm was doing well enough, having grown to $600 million in revenue with 2,500 employees over the long arc of its history.
But as Burson and his leadership team looked toward the future, “we knew we needed to get bigger,” he says. “We were a very successful 20th century firm that needed to transform into a 21st century powerhouse.”
That growth would require several key steps. “If you’ve read Jim Collins’s book Good to Great, he talks about getting the right people on the bus,” says Burson. “Well, we had to get the wrong people off the bus.” Those “wrong people” were typically very talented, but not team players—and that was a deal breaker for Burson. “If you have people who are in it for themselves, it brings everyone down.”
To show the people remaining that he meant business about teamwork, Burson realized they’d have to rethink recruiting, hiring, evaluations, termination, “all the HR functions you don’t typically think about as driving a firm’s success—but they do. You can’t get to the goal line with shortcuts. You’ve got to be able to lay the foundation in order to be able to ultimately succeed.” Also critical, he adds, was the synergy piece—meaning how different departments collaborated with one another—and a focus on excellence.
A road map to the future
Once they had the vision, they needed a clear plan to get there—which necessitated building out the firm’s core values. “We realized we needed a core purpose of why we actually exist. The answer to that was: helping people thrive every day. And by people, we meant all the 2,500 people who worked at BDO, their families, their clients and the community, which is how we give back.”
Next, up: strategic plan development. “It was important to me that 100 percent of the people at BDO had a say in what it was that we were trying to accomplish,” says Burson. So BDO did a firm-wide survey and asked employees what they liked, what they disliked, “and, if you came from another firm, what did you like about that other firm that we could copy?”
Once they had synthesized all the feedback, they organized it all into what ultimately became the strategic plan for going forward, known as C.L.I.M.B.:
• C is for Culture and Unity. “You can’t accomplish anything in any organization if you don’t have the right culture, and that came through loud and clear in every employee’s response,” says Burson. “But the unity aspect is also important because we’ve got to operate as a team.”
• L is for Leadership and Accountability. “We wanted to build future leaders, to give everyone an advancement opportunity inside the firm.” Accountability was also key because the organization had become too big to micromanage and, to get even bigger, they had to be able to empower people lower down to use their judgment. “My feeling has always been that I’m not the smartest person in the room, and I want to surround myself with people that are smarter than me,” says Burson.
• I is for Innovation. “We did a lot of research on what futurists were saying about the types of services that a firm like BDO would be selling in the future and what our clients would want,” Burson explains. “We looked at how things might change—for example, do we need to invest in other areas?”
• M is for Market Prominence. This step involved an analysis of all the major markets across the U.S., the industries within them, the expertise BDO had in each, and what they still needed. “We used that as a springboard for our expansion program.”
• B is for Best in Class.” Burson knew BDO’s future success could not be about size alone. “Because obviously the Big Four are bigger than us and we’re not going to say, ‘Well, we’re number five,’ because no one wants to go to the 5th best firm,” he says. “But we don’t see ourselves as inferior to the Big Four. We believe we are number one in our clients’ minds.”
Burson is emphatic that the kind of organizational change BDO made had to be done methodically, and in order. “Because you have to start with culture—without culture, there’s nothing,” he says. “Then you’ve got to have the people to implement, and then the areas of innovation you need to invest in. So if you think about it, the C, L and I are all overhead. We haven’t earned any dollars yet, right? Then you get to M, which is where you start being able to perform.”
And perform they have. Burson credits the new strategic plan, and “a world-class workforce” with the firm’s growth of 191%, from $600 million to more than $1.8 billion, over the last eight years. “No other firm in history, absent the Big Four when they merged with each other, has had that growth,” he says, adding that 61% of that is organic growth, vs. 39% from expansion. “I believe that’s because we’ve got the right people, we’ve been able to drive our staff turnover considerably down, and been able to provide the types of services our clients are looking for.”
Foundation for uncertain times
The heavy lifting BDO did a decade ago to transition to a 21st century firm positioned it well for the current economic uncertainty. “For us to thrive with all this disruption taking place around us, we needed a foundation of stability and trust, and we’ve got to be able to take some calculated risks,” says Burson.
Two acquisitions made shortly before the pandemic hit proved particularly prescient. The first was Lootok, a crisis management and business continuity company. “Don’t ask me why or how I even got to think about [that one], but that was to me, one of the best decisions,” he says. In addition to helping with clients in crisis, the acquired business was able to help BDO’s executive team design a path forward and to work through all the issues. The second acquisition, Loughlin Management Partners, brought BDO turnaround management expertise. “We felt the economy was going so well that it couldn’t last forever. We had to position ourselves for the turnaround.”
The company had also doubled down on digital transformation in recent years, believing technology to be a critical enabler of resilience. “We’ve invested significantly in our digital capabilities—our people, our service professionals, our clients, all of this was very important for us,” says Burson. “It’s proved critical in helping to protect revenues because as long as we can get the information, we don’t have to be in an office.”
Technology, he adds, is the answer to a lot of the current problems facing his midsize clients. “A lot of companies haven’t gone digital, and that becomes a problem because then they’re going to play catch up,” he says. “We’ve been advising our clients for years in terms of digitizing the operations and moving in that direction because everyone is going to be a technology company.” Specific to the pandemic, BDO has been telling clients to stay close to their customers, be clear about cash flow, make sure receivables are always current and maintain a good relationship with the bank. “In other words, just good fiscal hygiene.”
Looking ahead, Burson expects this fiscal year to be a good one. “We’re providing good service, our clients seem happy and we’re not having to incur a lot of the expenses like travel, the airline tickets, the hotel, the meals and entertainment. We have training seminars that we’ve turned into virtual events. So there’s going to be significant cost savings in our operations. So I’m ok for this year.
“My concern is more for fiscal ’22. That’s where the issues could come into play. And that’s because I think you’ll see more and more companies, depending on how long the pandemic continues, run into trouble and potentially going to go out of business. And when the pandemic ends, a lot of the expense and cost savings we will have this year will come back. So if we have all that additional cost, we’ll need additional revenue to offset that. So that’s the big issue. So what I’m doing is driving our business development folks probably crazy in terms of asking about pipelines and new business. But really, we have to stay close to our people, protect our revenues at all times and make sure we’re meeting clients’ needs.”
This is when the quality of leadership, up and down the organization, will truly be tested. “We need leaders who are respected inside the organization, someone people feel they can trust,” says Burson. “They’re not going to follow me just because I’m the CEO. “They will only follow you if they like you, if they respect you and they trust that you’re looking out for their best interests as well.”
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