Strategic Challenges/Opportunities: An Interview with Peter O’Connell, Managing Partner at Shaw Gibbs
For Peter O’Connell, managing partner of top 250 firm Shaw Gibbs, there should be less focus from firms on providing advisory services, and more on providing existing services in an innovative and better way. This still chimes with the majority (59%) of firms who believe that ‘developing new products and new ways of delivering accountancy services’ is the biggest strategic challenge in the next three to five years. However, he believes many firms will focus on the ‘new products’ idea, and that as Shaw Gibbs already provides advisory services, it is focusing its attention on changing the way the company does things.
In fact, it is for this reason Mr O’Connell is challenging people to look at doing things in a completely different way, rather than what he believes is commonplace in the industry, of resting on laurels.
“People often say we do it this way because that’s how it’s always done and I’m challenging that,” he says.
This change of tact has helped the company to make itself more prepared and robust when the pandemic set in – as it already invested in Microsoft Teams, and cloud accounting software with Silverfin and Xero.
“We’re constantly looking at new products and software that will help us to do things better internally,” he says.
It’s for this reason that Mr O’Connell says automating processes and workflows is the biggest opportunity for the firm, in line with the 62% of managing partners.
Mr O’Connell explains that the company has developed new products and will continue to do so.
“Our desire is to become a full-service firm. One of the things we did a little bit of coming into lockdown was providing HR services. Our aim has always been to mirror a lot of what the financial director of medium-sized businesses is expected to dabble in,” he says.
The company has a corporate finance team, insolvency work, HR and a payroll suite.
“In addition to that, we’ve started looking internally to see if we can develop products internally to help us be more efficient in terms of what we’re doing. This has included the development of our own in-house client onboarding piece, which helps us efficiently onboard clients and our own employee planner to allocate people work,” he says.
Making more of data
Previously, firms would receive a single client data file once a year, and accountants could do very little with it. Now, Mr O’Connell explains that there is far more that it can achieve as it has access to clients in real-time.
“This means you can start looking at trends such as whether they are spending money on research and development and if they are we can talk to them about R&D tax credits. If we can see their staff costs going up, we could talk to them about pension planning for clients as we have a financial advisor, we could talk to them about recruitment as we have expertise there, and so on,” he says.
He believes many of these trends can’t just be picked up by glancing at the data. Instead, there is a requirement for analytics tools.
“If you don’t set up analytics to do it, it becomes very time-intensive, particularly as you’re trying to find trends across multiple clients,” he says. “Having access to this trend data allows us to become an advisor and react quickly to risks and opportunities we identify.”
Effective plans and effective leadership
When Mr O’Connell was asked how he believed he was doing as a Managing Partner at making strategic decisions, he says he picked ‘A’ – very effective. This is because along with the rest of Shaw Gibbs’s directors, he put together a five-year strategic plan in October last year and started delivering it prior to lockdown.
“We’ve got a pretty clear idea and objective of where we’re going for the next four or five years. The challenge is changing the culture and getting everyone to buy into it, and this has been made harder throughout the pandemic as you’re trying to deliver that message across to people remotely,” he says.
He believes that many Managing Partners may have selected ‘reasonably effective’ instead as COVID-19 has put a few doubts into people’s minds as to whether they’re going in the right strategic direction.
In light of COVID-19, there is an inclination for many firms to contact their clients more frequently through Zoom in a bid to communicate their value and offer to clients, but O’Connell says that with so many people suffering from Zoom fatigue, there have to be alternative methods to reach clients such as through clever PR such as an article in a trade publication.
Compliance v Advisory
Mr O’Connell believes that firms shouldn’t believe that their revenue will switch from compliance to consultancy and advisory services, but rather that compliance will be maintained and that advisory services will grow. In other words, he sees overall revenue rising and therefore the proportion shifting – this is what many Managing Partners may have been thinking when 59% of them said they expected most of their revenue to come from advisory services in five years.
“The majority of our work comes from compliance at the moment. If you build a very efficient and effective compliance service and you have a lot of clients in there, and they’re paying you a reasonable fee, and because you’ve got good systems and processes, you’re making a reasonable profit on it, then this gives you the ability to build an advisory service around that,” says Mr O’Connell.
Compliance enables firms to build a client list, and the bigger it is the more opportunity there is for advisory work.
“I always think that advisory will be a more profitable product line in the future but I also think it’s essential that you have a very strong and big compliance function so that advisory people can get clients from it – if your compliance business drops away to next to nothing then you’re going to have very few clients to try and sell advisory services to,” he says.
Currently a lot of Shaw Gibbs’ clients only need advisory services once every few years, and for certain advisory services such as inheritance tax planning it is just a one-off service.
The combination of COVID-19 and a strategic shift have meant that Mr O’Connell believes the many skills that need to be improved in his team are communication skills and the requirement for more critical thinking and problem-solving, both in line with the findings in our research.
“Within communication, I think building rapport with people and a trusting relationship and the ability to get on with clients. In addition, it’s about being empathetic to client’s needs at the moment as well but some of those really soft skills are the hardest to teach people because to a certain extent they’re either naturally built into people or not,” he states. This has been echoed throughout the breakfast series hosted by SIlverfin too, the skills required by the accountant in recent months have been the ability to communicate and advise on a human level with clients – and be cognizant of the stress and pressure they’re under, particularly in the case of SMEs.