Move Over Luddites: The Youth is the Future of the Profession

"Our answer is the world's hope; it is to rely on youth. The cruelties and obstacles of this swiftly changing planet will not yield to obsolete dogmas and outworn slogans. It cannot be moved by those who cling to a present which is already dying, who prefer the illusion of security to the excitement of danger." —Robert F. Kennedy, "Day of Affirmation" address, June 6, 1966, University of Capetown, South Africa

I first heard of Brendon Harrex when he e-mailed me on July 13, 2004. While many firm leaders pay lip service to the idea of innovation, when it comes down to actually implementing new systems and processes the status quo proves to be firmly entrenched.

Brendon had read my ACCA booklet, Trashing the Timesheet, a radical idea, to say the least. Most accountants start by reading the first booklet in the series, Burying the Billable Hour, but Brendon made the connection instantly. Here is what he asked me in that first communication:

Your thoughts further confirm my thinking that as a profession we cannot continue to create value and attract young people to accounting as a career as long as we sell time and not value. I am one partner in a practice of 10 partners and I have the opportunity to convince them of the merits of your thinking in an upcoming strategic retreat in early August. I think I have created a compelling argument in support of "value" thinking; however, I suspect I will get lots of questions relating to how this works in practice.

Do you have any contacts in New Zealand who are further through the conversion process than our firm or any material that may be useful in strengthening my case? I want to see us adopt value pricing as soon as possible otherwise we will be overtaken by technology and clients who demand more from us than our systems can deliver.

I would greatly appreciate any assistance you could provide. Keep up the fantastic message.

These questions demonstrate Brendon’s passion for continuously learning, inquisitiveness, and challenging the conventional wisdom endemic in most firms, which states: "Because that's the way we've always done it."

After providing Brendon with more resources, including an extensive reading list, and putting him in touch with my colleague Peter Byers (who had already implemented these ideas into his practice), Brendon was able to communicate the message to his partners and build enough of a consensus to allow me to visit his firm in February 2005 to conduct a two-day workshop on Value Pricing and Trashing Timesheets—no small feat in a partnership full of skeptics.

Shortly after this meeting, Brendon was appointed Chief Value Officer—the first in the world that I am aware of. This is an incredibly challenging position, the responsibilities of which you can read about in my article: “Who’s In Charge of Value at Your Firm?” Brendon’s performance in this function was outstanding and he was subsequently appointed Chairman of the firm on May 2, 2006.

On June 21, 2007, while I was in London presenting at the CIMA Conference, Brendon sent me the following email, updating me with his exciting news:

Hi Ron,

Well, who would have thought 12 months ago that Ward Wilson would be part of the consolidator trend that appears to be gaining more momentum in our profession as the average age of qualified accountants continues to rise. To paraphrase Tom Peters' quote that you also used in Professionals Guide to Value Pricing, "I struggle to see how mating two dinosaurs would create a gazelle!"

This mating has provided me with the incredible opportunity to create my own gazelle known as the Harrex Group. I have attached for your information a copy of our launching advert that ran full page in the local newspaper.

The Harrex Group truly is a firm of the future, offering customers accountancy-led ideas, advice, and project management. Of course, we operate without timesheet and this frees us to focus on the delivery of high value business solutions rather than assuming that all time has the same value (as long as it is productive of course!).

I have appointed a non-accountant CEO, Nicki Morsink, who is the former CEO of Ward Wilson. Unlike most accounting firms where the CEO is the person you blame when the committee (the committee = all owners as everyone must have their say) makes a bad decision, Nicki is a real CEO—she signs the cheques, drives the business and ensures we are all performing. This works well as I am focused on the customer interface/selling, pricing and coaching.

Ron, I believe that the future of our profession lies in smaller accounting businesses led by innovative individuals. I share Chris Marston’s concerns about the ability of large firms to implement value pricing—most have such a fear of reduced income that they cling very tightly to what they can measure (regardless of its relevance). I simply believe that many traditional accountants are incapable of operating without timesheet.

Upon formation of the Harrex Group, I was approached by the very best people who wanted to be part of a firm of the future and not a firm of the past! We currently have a waiting list of talented people wishing to join us and this is certainly not a common complaint of the profession in our part of the world.

I believe the smaller, innovative firms will attract all the talented staff and eventually dominate the accounting world, as their innovative services and ability to respond to the market will become increasingly in demand by business.

Thanks for your fantastic support and energy, Ron—you don’t know how marvelous it feels to be in a business that is focused on the right things!

Regards,

Brendon

Brendon understands the vision and leadership required to operate a firm of the future. It is not solely about creating a more profitable firm, but about creating a better quality of life, both for the team members of Harrex Group as well as the prosperity of our profession. Accountants are among the premier knowledge workers, not union employees. The value they create is not determined by how many hours they work, but rather the value of their ideas. Yet the metrics in most firms treat workers as if they worked in a factory. Knowledge workers do not work to the rhythm and cadence of an assembly line, but rather an iterative and reiterative process of the mind.

How many accounting firms do you know that maintain a waiting list of people dying to work for it? If this doesn't prove the power of operating within a Value and no timesheet culture, than the leaders of this profession are blind, and the only way we will make progress is funeral by funeral.

The Harrex Group is a shot across the bow of the SS Billable Hour, along with its last-of-the-Luddites captains. Wake up firm leaders, the future is already here, it's just unequally distributed. Once more and more firms, like the Harrex Group and Exemplar Law, begin to pilfer your human capital you'll be forced to change your ossified ways or be destined for an existence of mediocrity.

Today’s knowledge workers own the means of production, which tilts the economic power in their favor when selecting a firm in which to invest their intellectual capital. Most firms haven't even recognized this fundamental shift in how wealth is produced because they are trapped in an Industrial Era mindset. Harrex Group recognize the realities of a knowledge economy, and have adopted a better business model—one that will inevitably be replicated by other firms in the future—in order to attract the best and brightest into our profession. This cannot be accomplished by today's firm leaders who cling to a present which is already dying, and who prefer the illusion of security and mediocrity to the excitement of dynamism and change. It must be achieved by truly visionary and courageous leaders.

Brendon embodies the essential characteristics of such a leader: Effective interpersonal skills; risk taking, innovation, and creativity; ability to change minds; continuous learning; pride, passion and commitment

None of these characteristics can be measured—they must be judged, discerned and experienced. It is a rare accountant that possesses all of them while still remaining humble and grounded in a deep abiding faith in the future.

I have had the great good fortune to spend time with this incredible individual, and he continues to teach me lessons and add immensely to my intellectual capital. It was a personal honor when he became part of the think tank I founded—VeraSage Institute—in order to help spread our message and ideals around the world for the betterment of our chosen profession.

Meeting Brendon reminded me of what Winston Churchill wrote in A Roving Commission, in 1930:

Don't be content with things as they are…Don't take no for an answer. Never submit to failure. You will make all kinds of mistakes, but as long as you are generous and true, and also fierce, you cannot hurt the world or even seriously distress her. She was made to be wooed and won by youth.

No doubt, I am biased with respect to Brendon’s leadership and vision. But I have absolutely no doubt that his contribution to our profession has just begun. This is the beginning of the end for the Last of Luddites, those firm leaders that don't have the guts or the vision to imagine any other way to run a professional knowledge firm.

Brendon is leaving a legacy, not just for his firm, but for our profession. Brendon has already created quite a legacy, and I have no doubt the best is yet to come. His leadership, courage, and perseverance is an inspiration to thousands of professionals around the world, and yet he remains humble in exaltation. I am honored beyond words to have him as a colleague, and—more importantly—a friend.

Check out Brendon’s innovative advertisement (as a pdf for a better view) explaining the Harrex Group.