6 min read

Is Your CPA Firm’s Culture Intact?

CPA firms are looking at the future of their businesses and coming to terms with new realities; working remotely, implementing rotating schedules, and an infinite number of hybrid options are looming large on the horizon. At stake in these new operating scenarios are management styles, firm culture, and employee assessments to name a few. To get to the bottom of what your firm’s objectives are and how to get your employees to strive for achievement, I talked to Jordan Birnbaum, ADP’s inhouse behavioral economist.


What the heck is a behavioral economist?

From my conversation with Jordan, a behavioral economist is a “firm whisperer” who can let all of us managerial types into the psyches of our team. He put it eloquently: “Behavior economics is essentially the study of how people actually behave. And that sounds kind of silly until you realize that classical economics is the study of how people ought to behave if driven by perfect rationality.”

Behavioral economics is the study of how people actually make decisions and act without the assumption of perfect rationale. Jordan and his colleagues try to anticipate irrationality and design “nudges,” which are little touch points to drive people toward better outcomes that nurture positive behavioral change within organizations. Like I said, a “firm whisperer.”

Before jumping into Jordan’s “how-tos” on navigating this transitional time, let me share this amazing gem he pointed out that really resonated:

“I can't think of another time, certainly in my life, where organizations had a better time to recreate their cultures and potentially lean into the gratitude that people have right now to still be employed.”

Keep this in mind as you meet new challenges in the coming weeks. On that note of positivity and empowerment, let's get down to the cultural shifts and ambiguities we are facing today.


Is Remote Culture No Culture?

“Culture is ultimately the way things get done around here,” Jordan said. “In a live office or in a virtual environment, culture can be intentionally designed.”

Creating a new culture with intention and transparency within your firm, if done well, should be easily transferable from office to home. Ultimately, it's about the fundamental tenets at the base of your culture. If you base your culture in transparency, treating each other well, setting acceptable norms of behavior that are thoughtful, inclusive, and generous with time and expertise—that is going to translate wherever you are.

“Culture is ultimately the way things get done around here.”

If culture really is formulated around CPA firm ethos rather than a floor plan, how can we, as managers, best construct this culture to support our employees?

Forward looking and forward motion go hand-in-hand, but they require letting go of some old habits.

Depending on where you are in the country, you may be working from your living room couch, the back deck enjoying the spring rays, or from your toddler’s nursery. As a manager, you have to consider the question: Is working from your three-year-old’s room really working? And if so, how do we time-sheet that?! Sound familiar? Now, take a deep breath and let go.

Doing homework | Botkeeper

Guess where and when the time-sheet originated? England. During the Industrial Revolution when you were more likely to die of cholera than make it to 45. In the Information Age, should society really continue to hold tight to the managerial styles of the 1800s? Unless you're a factory worker, probably not.

Need a book to tell you this? Check out Thinking Fast and Slow, by Daniel Kahneman. (Jordan loves it.) The book draws attention to two distinct modes of engagement in the human brain: one fast and intuitive and the other slow and deliberate. Putting a punch card mentality on the kinds of work done at a CPA firm is counterintuitive to quality productivity. A timesheet could encourage people to draw out the intuitive, easy work and blow through the meticulous. What’s certain is that if the desired result is quality of work, then the clock is a poor measurement tool to apply!

“When dealing with CPA kinds of work, the idea that you are somehow motivating your best performance by keeping an eye on people is just really not supported by data. What we find in the Information Age is that the best way to induce work, the best work, from your people is to tap into intrinsic motivation.”

Let’s talk about intrinsic motivation, which Jordan insists is the best way to get your employees to do their best work. Intrinsic literally means doing something because you want to do it. If you want to tap into intrinsic motivation at work, you need to empower your team with three things. And guess what? A timesheet is not one of them.

They are:

  1. Autonomy: “People don't necessarily have to set their own goals, but they have to be free to figure out how to get their work done. This flies in the face of the idea that keeping your eye over people's shoulders is in any way conducive to getting them to do their best work,” said Jordan.

  2. Mastery: “As human beings, we all have an inherent need to demonstrate our worth and our value,” Jordan said. “And so, it's really important that we design jobs where people have an opportunity to demonstrate their mastery. And oftentimes this is delivered through recognition.”

  3. Relatedness: “It's connection — a human connection with our colleagues, with our clients, with our communities,” Jordan said. “Even just aspirational connections with customers that we never will meet in person. But it's fulfilling the sort of need for interpersonal connection.”

A work culture that facilitates people getting these three things will result in the best work possible. The challenge, historically, is how to build an office that gives people these three things. And now the question is, “How do we fulfill those things through remote work?”

Remember the behavioral economist “nudge?” This is where it comes in handy. A nudge may not even look like an incentive. What it really looks like, is giving people an opportunity to do what’s best for them and the firm by making it easy.

Nudges and facilitating intrinsic motivation fall on the shoulders of leadership. How can you as the leader be proactive about finding opportunities to publicly provide positive reinforcement and recognition with intention and consistency? This is a huge motivational tool. One way to make this an intentional fixture of your firm’s motivational culture is to make a checklist of weekly actions you can take to encourage your team.

  • Public recognition is a huge motivator. Praise your team publicly and individually, not just for their wins but also for how they handle adversity.

  • Construct meaning for your team and frequently reinforce it. Remind your team that by assisting small businesses and families, they are helping the fabric of American communities stay strong.

  • Publicly articulate your faith in your team to work through challenges and encourage a team prerogative versus an individualistic one.

The key is to take action frequently to keep motivation high. If we’re working remotely, we may lose that “finger on the pulse” insight of our team. Proactively making those group Zoom conversations where motivational feedback is shared may be an effective and consistent way to keep people feeling engaged and valued.


Letting Go of the timesheet but holding tight to KPIs and dashboards?

Male mathematician | Botkeeper

What did we just say about autonomy?!

“Don't assume that a performance appraisal is the best way to accomplish what it is that you're trying to get to.”

If you’re preoccupied with evaluating your firm’s performance right now, stop and ask yourself two questions:

  • Is your appraisal intended to provide feedback to the employee as a means of helping them get better?

  • Is your appraisal intended to be evaluative so that the organization can make better decisions about what to do with people's bonuses?


Jordan stresses that each of those initiatives is completely worthwhile, but you must choose a lane. Additionally, in the best of times, performance appraisals are stressful. If you’re intent on evaluating employee performance for long-term strategic planning, put that plan on ice. Now’s not the time.

If, however, your appraisal is to determine bonus structures, step on it.

“I think that paying, if you are in the position that you can...pay people right now,” Jordan said. “Your dollars will go farther right now than they will during any other period.”

However, is an appraisal the right path to take to determine a reward structure? “Don't assume that a performance appraisal is the best way to accomplish what it is that you're trying to get to,” said Jordan.

There are a lot of different ways to approach the question to bonus or not to bonus. Jordan suggests that there will be a lot of forgiveness and awareness considering the hit in revenue businesses across the board are taking.

“I would say that when it comes to bonuses, transparency is paramount,” he said.

Perhaps you sidestep the entire bonus issue by giving everyone the same amount. It’s a non-traditional way of approaching it. Practice some creativity and don’t assume that an evaluation is the best option.

“It would seem to me that accountants in particular could appreciate the importance of identifying what is actually a value and what isn't,” Jordan said

Business analytic working with documents | Botkeeper

To get to the value of things, apply that same bonus structure creativity to other ways of evaluating your employees. For instance, rather than looking at timesheets, you can put more weight on client satisfaction, client request fulfillment, or any number of other metrics.

“It would seem to me that accountants, in particular, could appreciate the importance of identifying what is actually a value and what isn't.”

And on that note, here are some of the most ridiculous freakonomics anecdotes that Jordan shared. The scenario is as follows: Bus drivers weren’t arriving at their bus stops on time. So, a decision was made to unilaterally reward the drivers financially when they did arrive on time. Overnight, all the bus drivers were suddenly nailing their schedules. However, they were doing it at the expense of picking up and dropping off riders.

Get it? The objective was timeliness, but that was a distant second to the core objective of providing the service of transportation. The moral of the story is that finding the right tool to measure your employee productivity, happiness, sense of connectedness, and motivation is the world's biggest Swiss Army knife. Don’t try to oversimplify it or you may set yourself up for some really significant, negative consequences.


Culture and Contentedness

Management styles were historically formulated around antiquated, industrial norms. CPAs are in the industry of applying their mastery of the language of business and finance to help people. That’s a very human service and can be managed using very human, interpersonal skills. The loss of best practices has sent us all into a tizzy, but the amount of crowdsourcing and accountant-to-accountant teamwork speaks to just how human and generous our profession is!


If you loved Jordan as much as we did, check out ADP’s complimentary services aimed to help financial advisors through this time of uncertainty with tools, up-to-date news and live-streaming summits!