We talked to Nathan Keeley, a Partner at MHA Carpenter Box based in Sussex about their leadership challenges and why they shifted their business to ‘digital first’.
Could you tell us a little bit about MHA Carpenter Box and your role there? Congratulations on your recent nomination in the Accounting Excellence Awards.
Thank you. We’ve been nominated in two categories; Practice Pioneer and Large Firm. I’m a Partner at MHA Carpenter Box which is a mid-tier firm based in Sussex. We’ve been around for nearly 100 years, growing the business to 180+ employees and with that you tend to inherit a lot of legacy systems and processes. I’m responsible for cloud and digital solutions, so my role is dedicated to innovation and bringing new perspectives to solving issues and inefficiencies. It’s my job to be the person that says “just because we’ve always done it this way doesn’t mean it’s the right way”.
Not a small challenge. I understand as a firm you’ve recently undergone some structural changes. Could you tell us about that?
We’ve recently split our business services into micro or small companies and larger corporate companies. This has meant that we’ve been able to develop new processes more appropriate for each size of company – rather than having a business services department with a single process that isn’t really fit for purpose for either. The needs of a client that turns over £50,000 vs £10 million are fundamentally different and this structural change has meant that we can deliver services that are appropriate for the client’s size. If you have a single department catering for all clients you tend to lean towards the larger clients and that means you overlay too much administration on the smaller ones.
That’s quite unique, how did you come to that approach?
We were seeing compliance become increasingly automated and smaller more agile firms were able to offer services at a lower cost than we were. They don’t have the overheads and are able to take a slightly more client by client approach. We have around 1,500 clients that sit in the smaller category. It’s allowed us to tailor our services to fit the client's needs. Larger clients benefit too as our corporate team specialises in the disclosures that are fundamentally for larger firms (holiday accruals, lease commitments etc). You’re overlaying a different set of questions for a different type of client as opposed to one size fits all approach which isn’t relevant for everyone. We’re able to serve our clients – both large and small – better.
Has that been a conscious decision to evolve the business model of the firm?
Yes - we have around 65-70 people in our business service department and we found that we didn’t have a consistent way of working. In the new model, managers and below specialise in a particular size of client which means we can set up our systems and processes to support that way of working. It’s meant I’ve been able to look at the technology we use and tailor it to each arm of the business – it’s also meant our digital transformation has worked better. There were tools out there that we wanted to use but we couldn’t because of the way we were set up and now we’ve gone through this change, we’ve been able to get the benefit that tools like Silverfin brings.
How did you decide to make this change?
We had quite a disjointed process from when the client data came in to when our work left. We had systems to support things like the production of working papers, but it was one system on top of another and it led to a lot of inefficiencies. There were lots of layers of technology to support an over-engineered process that wasn't fit for all our clients. We recognised there was a clear opportunity to do something different, but we struggled in the early days to find a solution that was fit for purpose. We didn’t want to oversimplify our offering, and so for us Silverfin was perfect as it’s allowed us to tailor our own solution rather than taking something else that somebody else has done and trying to make that work.
Are clients expectations changing? Did you in part make this change to support that?
Technology has led the client to expect a different experience and we needed to be in a position to support that. Traditionally an accountant would have say 4 touch points with a client over a year but we now have well over 40 because it’s so easy to just send an email. Clients expect answers faster, they’re sending us spreadsheets and data and the expectation is we should have a process to support giving them answers in almost real-time. Our systems have all been engineered to support this. The goal will be full real-time information and transparency for the client.
What we think will happen is that 40 touch points will turn into 400 before long and this will all need to be supported by technology. There now isn’t a limit on how we collaborate with clients, we are all able to dive into the same system and work together even down to a year-end process. We can deal with queries and questions for the client and keep them up-to-date within the same system. As the client is so involved in the process it means when those accounts do get finalised we have less push-back and final questions because the client knows what they’re expecting to see.
How has this affected your relationship with clients?
It’s made them better. We have more interaction and work more collaboratively. Clients also know what they are getting for their money, they know what stage we are at with their accounts so they’re not needing to chase us to understand progress.
We’re also in a position to offer more services as we have real-time information so are able to proactively advise clients. We can say to them let’s look at some insights or some benchmarking, management accounts or tax planning etc. All these things are much easier now and we can quickly identify the clients that need these services. It’s not easy when you have a lot of clients to identify who might need which services, so it’s been a big thing for us to be able to use data to understand this better.
What was the catalyst for this digital transformation?
Well it’s a number of things. It started off with my frustration that things were just taking too long and not being able to give clients as good a service as they want and deserve. We just wanted to provide a better service, and help businesses be better as a consequence.
It’s also a lot easier to look after an existing client than to find a new one, so we were keen to look after our existing client base and extend out that average client life by a year or two as this makes a significant contribution to our business. We want to keep our clients happy and offer them more.
Was it just a desire to look after existing clients?
No we also wanted to speed up the process of acquiring new clients. There’s an opportunity cost associated with the time it takes to onboard a client. We need to gather lots of information, a true likeness and all the rest of the onboarding requirements. The whole process could take as long as a few weeks, and that’s not right in our instantaneous world. The digital transformation meant that we are now able to onboard clients faster and that means our staff have more time to do other work.
Who has been involved in the project so far?
It was originally driven by me and my frustrations which certainly started things moving. I proposed initiatives that benefitted my department but obviously the needs vary department by department. We now have an IT Working Group which is made up of members from every department who decide on the priority of projects from the whole firm's perspective.
How do you prioritise projects? Is it ROI, business need?
We try to assign a monetary value to these projects. Our client Portal saved us £40,000 in postage alone. We look for our biggest problem areas, what's urgent and mandatory and those take priority. Below that almost becomes the wish list of each department, feeding in what they would ideally want.
How did you get buy-in from the other Partners?
That’s been my biggest challenge over the years. We’ve had such a sporadic approach historically to systems, and we've prioritised technology based on which Partner had the loudest voice essentially. We needed to refine the approach, we had lots of legacy systems that didn’t interact with each other and were inefficient. I started small with trialling technology and presenting back to a small Partner group with evidence on how and why it worked. We didn’t include everyone initially as this would’ve presented its own difficulties in getting the wider Partner network to understand the concepts and the value of the capabilities you’re talking about. It’s challenging because an audit Partner will care about different things to another Partner from another department. So it was almost two phases of trials and approvals. Initially with a small group, then a wider group with evidence of how and why it works. The evidence can’t be conceptual either, it has to be very tangible to get buy-in.
So is that what you’ve learnt about leading change?
The fundamental thing is you can only lead change if you bring people with you, that is the biggest thing I’d say. In the past I kept running into a brick wall by trying to make changes on my own and in a partnership that doesn’t work. Those checks and balances are there for a reason and so you have to involve people early in the process to be successful.
How has COVID affected this project?
It’s obviously increased the tension between evolving the firm for the future and the short-term priority of increasing chargeable hours. My argument is that we need to be accelerating our digital transformation efforts so that we can be successful post COVID.
Any advice for other firms looking to lead a project like this?
It depends completely on the size of the firm. What I will say though is it’s essential to fully scope out any project before you start. You need to understand what you’re trying to achieve and how you can get there.
Building the right team is also very important. Sometimes in professional service organisations these types of projects get given to those that have the capacity to manage them, and don’t necessarily get handed to the person who is the best for the job. The Project Manager needs to be able to navigate the business well, that’s understanding stakeholders and champions whilst also managing timelines, deadlines and other competing priorities. What I’ve learned is don’t focus on the billable hours of the individual running the project and you need a proper plan, involving the right people at the right time.