Kreston Technology Bulletin
March 29, 2020
March 29, 2020
March 26, 2020
By Liza Robbins.
Is your firm ready for the Coronavirus?
The last few months have exposed just how vulnerable our economy and our businesses are, in the face of this catastrophic, unforeseen event.
We have already seen some businesses endangered overnight, as their clientele have disappeared or their supply chains have collapsed. Others are watching their clients and suppliers struggle, knowing that they will soon feel the knock-on effect.
Make no mistake: The human cost is tremendous. Both employees and employers are at risk of losing their livelihoods out of the blue, and many will struggle to recover from this blow.
This is a risk we, in the accounting industry, need to take very seriously as well.
That’s why I picked up the phone to speak to David Rosenthal, an associate at Jeremy Hyman Associates, who specialises in business continuity here in the UK.
He told me that it was not uncommon for businesses to be caught unprepared by serious events which threaten their operations.
“Most businesses will have elements of a business continuity plan, but it’s usually not up-to-date, current or effective.
“It’s a question of priorities – most businesses don’t pay this enough attention until they face a disaster, by which point it can be too late.”
He pointed out that while these events are rare, they are hardly uncommon.
In addition to the Coronavirus, there are numerous examples of businesses affected by cyberattacks, critical IT failures, local terror attacks, natural disasters affecting their supply chains and so on.
So you need an emergency plan.
Step 1, he says, is to put together a disaster recovery team.
“Irrespective of what needs to be done, you need to identify the people responsible for putting together the plan, and executing it.”
Their first job is to assess the risks to your organisation, whether these involve tech (for example, your servers go down and you can’t access data), your people being unable to reach the office, economic disaster and so on.
Then they can put together their plans.
David recommends working out what threatens the very survival of your business, especially in the first 2-3 days, and mitigating those risks.
Cashflow and payroll are often key.
“If you get your bills out 48 hours late your company will survive, but if you pay your staff 48 hours late, your staff may experience serious issues around paying their rent or mortgages, and that could be a very significant issue for you.
“Similarly, if you don’t take care of cashflow, that could affect your entire supply chain and survivability.”
You must also consider what documents and resources you might need to access in the immediate aftermath of a disaster.
For example, he asks, “Do you have a list of all your employees and clients and their contact details? How about passwords to log into your systems remotely? Do you have access to emergency funding to pay your staff, if for any reason your payroll people are out of action? And what about access to your clients’ records?”
The plan must specify how often you are going to backup these critical documents or resources, and where they are going to be stored, in case your main site is inaccessible.
“You need a backup site that is far removed from your primary site,” he notes, adding that after 9/11, Lehman Brothers’ backup site was within 1 km of the Twin Towers, rendering it effectively useless.
Finally, your Disaster Recovery Plan must be continually tested for effectiveness and refined.
“This is where most companies fall, irrespective of their size,” says David. “People leave, risk profiles change, and so do your services and priorities. The recovery plan that was right 18 months ago is probably out-of-date today.”
As examples of best practice, he cites Societe General – where he was formerly COO – which updated its staff’s contact details every quarter, and Merrill Lynch in London, which sends staff to work at its “emergency” site every quarter, to make sure that they can operate from there smoothly.
“There are no end of cases where companies set up IT systems so their staff can work from home in an emergency, but when it comes to it no one has the right logins or the IT guys just aren’t available,” he says.
The biggest mistake companies make, he adds, is to take “a naïve approach to risk – setting out solutions which are one-size-fits-all.”
For example, they might prioritise having senior people available, while a PA, admin or HR staff might be more valuable in an emergency. Or they send their entire teams to one alternate location, whereas in the case of a virus, teams should really be split or work from home.
Ultimately, he says, if you do not take these actions you are risking your future, your relationship with your clients and your reputation – and potentially failing your employees, to whom you have a primary responsibility.
When it comes to accounting firms, he adds, “You talk to your clients about managing risk, but how can you talk about this authoritatively if you don’t manage your own risk?”
He’s right.
I hope that when the immediate pressures of the Coronavirus emergency are over, we will all take what has happened as a prompt to put in place a serious, effective disaster recovery plan.
Our futures depend on it.
I am free to talk to any of our Kreston members, should you wish to discuss this further. In this situation it really is important that we all keep in touch and support each other.
March 6, 2020
By Liza Robbins.
Last month, Marie-Laure Delarue became EY’s first Global Vice Chair – Assurance.
Her appointment brought the share of women on EY’s most senior management body to over 37%.
The announcement was made with great fanfare, and the appointment was celebrated as great progress for women…
…But the truth is, it left me underwhelmed.
That this is still seen as a significant milestone in 2020 shows just how slowly our profession is developing, when it comes to women’s issues.
But was this perception widely shared? How do other women in the industry see the progress we’ve made, the challenges we face, and the steps we still need to take to support women in accountancy?
I set out to find out.
In honour of International Women’s Day, which we celebrate this Sunday, I spoke to three notable women on our Future Leaders programme to get their views. The discussion which ensued was, by turns, inspiring, challenging and thought-provoking!
There seemed to be across-the-board agreement that the industry is still male-dominated, particularly at the top, and that it is important to have more women in positions of influence – although they were not insistent on a 50/50 ratio.
However, there was a nuanced understanding of what caused the imbalance.
The women I spoke to did not blame discrimination or sexism, and (happily) felt that there were genuinely equal opportunities in their firm.
Instead, they said, some women simply did not want to reach “the top” professionally, because they wanted a good work / life balance which would leave them more time to spend with their families.
“I don’t think that gender stands in the way for us,” says Jennifer van den Berg, tax manager at Kreston VDN in Belgium. “There are lots of opportunities, but you have to grasp them and aim for them.”
Does this mean that there is nothing more for firms to do, to help women achieve in the workplace? No.
The women seemed to feel that, all too often, firms still discounted women who wanted an active family life. They want firms to redefine what is considered “normal” in this context, and do more to support women so they did not have to choose between work and family quite as often…
“When clients tell us they can’t make certain meeting times we switch things around for them. We need to practice what we preach, and treat our own staff the same way,” says Jo White, director of tax advisory at Kreston Reeves in the UK.
Everyone recognised that this process was already well underway – with flexible working cited as one of the most significant advances for women in recent years. But more needed to be done to make this an accepted option.
“It’s not enough to have an official policy if you get ‘that look’ when you leave the office early,” says Jo White. “We need to have more men using flexible working to normalise it. It shouldn’t matter when or where you work, as long as you get the job done.”
Of course they are right – flexible working benefits everyone, dads as well as mums, single people and anyone with family responsibilities – and should be regarded as a human issue rather than a gender issue.
Another factor sometimes holding back women is their own lack of self-confidence, says Juanita Cid, Salary Partner at Kreston Lentink Audit BV in the Netherlands.
“I frequently see men being more assertive – about their own needs and goals, standing up for themselves, and about offering up their own opinions in meetings.”
“Women often feel they need to prove themselves more, and sit in the shadows because they don’t feel confident enough to be bullish,” agrees Jo White. “The men, by contrast, just push through.”
Assertiveness, however, is a skill that can be learned, and the women were eager to see firms offering more “soft skills” training to all staff – “resilience and confidence, which you don’t learn in accountancy exams,” says Jo White.
One way to learn soft skills is through a mentoring programme. Interestingly, the women thought it was important not just to be assigned female mentors, but male mentors as well.
“Wherever they are in their career, they have done it in a different way. I’d like to understand more about what drives them and how they achieve day-to-day,” says Jo White.
Ultimately – and I suspect this is a generational thing – it was striking how resistant these successful women were to being pigeon-holed through the prism of gender.
“We need to stop thinking in boxes like this – that’s the problem!” says Jennifer van den Berg. “We can’t think that men do X, women do Y – it depends on the person.”
Like the others, she did not want to see initiatives in the workplace reserved for women only, since they could help everyone.
Most of all, they wanted women to stop being defined – and treated – as “other” or different.
“We need to change what’s perceived as normal,” says Juanita Cid. “Women can approach things one way, men another, and we need to value both and be more accepting of different ways of doing things.”
“I don’t like dwelling on the fact that there is a massive issue, like women are different,” agrees Jo White. “I go to women’s business awards, but sit there thinking, why do we need it? We should be celebrating women in the context of general success, not just because we’re women.
“In 10-15 years’ time, I don’t want to have these conversations any more, because hopefully there won’t be a massive discrepancy between men and women.”
I suspect this will happen, because while it was obvious to women of my generation that we were going to have to fight tooth-and-nail for opportunities, many younger women simply take it for granted that they are equal. They have grown up in a different world!
In other words, may the day soon come when International Women’s Day is redundant…
…And in the meanwhile, here’s to the wonderful women in Kreston – and to their success.
March 5, 2020
By Liza Robbins.
“Liza, who do we have in the Ukraine?”
Kreston Ioannou & Theodoulou, a firm in Cyprus, had just joined the network.
Co-founder Michael Ioannou was eager to start making connections with other Kreston firms, which was music to my ears.
But even I was taken back when I told him about our Ukrainian firms, and he replied: “Great, I’ll go visit them!”
And he did. He jumped on a plane to meet his new contacts in person.
The result? Just a few months later, Kreston Ioannou & Theodoulou already has three tenders with one of our Ukrainian firms, and they’ve even won one together.
And when I called Michael last week, they were busy preparing for another overseas trip.
“We’re about to go to Dubai, to meet the Kreston firms there,” Michael Ioannou told me.
They have also been to visit two firms in the UK recently, and have other trips already in the diary, as well, including to Kreston firms in Moscow and Italy.
Clearly, the Ukraine visit was not a one-off!
Rather, these face-to-face talks are part of an exceptional way of doing business, from which every Kreston firm can learn.
“We have a rule that we have to develop personal relationships with every client and associate, including our Kreston associates– not just know them on paper,” Gabriel Ioannou, one of the directors and Michael’s son, says. “It is embedded within the culture of our company.”
That’s why the partners meet with local clients in person two or three times a year, and clients overseas once or twice a year. This is an enormous commitment considering that they serve clients all over Europe and the Middle East!
This practice started when several local companies with the Big 4 complained to them that they felt they weren’t being paid enough attention because they weren’t large enough.
“In Cyprus, the personal touch is key to doing business,” Gabriel says. “We thought that we could do business differently to the Big 4”.
“If you talk to people only rarely, you can easily lose their business because you have no real relationship. But when it’s personal, they’ll tell you when something is wrong so you can rectify it. And it makes it a lot less likely that they will want to switch to another firm.”
Now, of course many accountancy firms – if not most – claim to develop close relationships with their clients, and boast of “exceptional customer service”.
But this is not really attractive to prospects – and not a real differentiator – since almost everyone makes the same claims.
Kreston Ioannou & Theodoulou have done the virtually impossible, and managed to turn customer service into a true competitive advantage.
One of the keys to making the face-to-face meetings work, they say, is to talk about more than just business.
“We might ask about your wife or husband, your kids, sports,” says Gabriel. “This could be a substantial part of the conversation, because the better someone knows you as a person, the easier it is for them to refer work to you.”
(Clearly, Kreston’s belief in know, like and trust resonates deeply with this firm!)
A visit to a client or associate is also an opportunity to get new referrals. Before the visit, they ask clients or associates to invite some of their own associates and clients to meet them.
They research the potential client beforehand, and provide as much value as possible in advance – all without charge.
“We help the potential client understand what they need and whether and how Cyprus will be beneficial to their business. We give them potential solutions in a friendly discussion,” says Michael.
“Of course they can try and implement them with someone else, which might or might not work, but eight times out of 10 they come to us. Only then do we start charging for our work.”
To make client service even more personal, they employ staff who speak some of the most common languages spoken by their clients, such as Italian and Russian.
The Italian-speaking staff member will accompany the partners on their upcoming visit to Milan and the Russian-speaking staff member to Moscow.
“Clients feel more comfortable when you speak their language,” says Michael.
And they call clients a couple of times a year simply to keep up the relationship, for example on their birthday.
All this has paid off handsomely.
The firm, which has been around since the early 1990s, has grown from 10 people in 2003 to nearly 70 today, almost all organically.
“We regard our flights and hotel stays as our main marketing cost,” Michael told me. “We generate a lot of referrals both locally and everywhere we work, because the people we know all think of us when they think of Cyprus.”
And they apply this powerful personal touch not just to clients, but to local banks and other associates with whom they deal with regularly – and now, to Kreston firms.
When they joined the network late last year they discussed with me which firms might be potential business partners for them, and now they are systematically visiting them. They will also be sending a team of delegates to the Madrid conference, so they can meet as many Kreston colleagues as possible.
It’s a wonderfully effective approach which has already generated several business opportunities and at least one new client!
And I know from my own experience, criss-crossing the globe over the past 18 months or so to meet my Kreston colleagues in person, just how important the personal touch is in building long-term, valuable relationships.
So could you prioritise holding more face-to-face meetings with prospects and clients?
Or could you meet people over video conference rather than sending an email or making a phone call?
The personal touch will always pay off.
March 2, 2020