CohnReznick CEO Frank Longobardi believes there is a major shift happening in the accounting world—one where firms like his are making the shift from the role of service provider to trusted advisor, providing clients with guidance and a more consultative approach. CohnReznick is leading the charge under Longobardi, and the company refreshed its branding earlier this year to reflect the new era—instead of “accounting, tax and advisory firm,” the company changed its descriptor to “advisory, assurance and tax.”
Chief Executive caught up with Longobardi to talk about how he’s leading the firm through this shift, the importance of company culture and corporate citizenship and how technology is impacting the accounting/financial world. Here’s what he had to say:
CohnReznick’s evolution from accounting service provider to advisor
The role of CPAs and accountants is changing dramatically today. And a lot of that’s due to the enhanced technology which is reducing the kind of work that we have done in the past, but also allowing clients to do more work internally. So we’ve always been the ones that have accumulated a lot of the data, but today, we have to be more data analysts as opposed to just accumulating data.
The profession is at a crossroads. It’s always been a look back in historical when we have done the audit process, but I think as you see over the next two to three years, there’s going to be a much more forward-looking approach to an assurance practice than there has been in the past.
Clients have demanded more than just compliance work. They’re looking for us to be trusted business advisors because they need somebody that can help them achieve their vision, their objectives, but more importantly, really know their industry. So the thing that we’re trying to do is create more of a one-stop shop for many of our clients, especially in the middle market, where we provide advisory, assurance, and tax services and to really try to get our professionals working as a team and not in silos. I think what you find in some of the firms is that the different departments work very much in silos. And we work very much in a team approach.
Recently we changed our firm logo and firm description to advisory, assurance, and tax. And we put advisory first because that’s really where we’re heading as a firm. So whether you’re in our assurance department, our tax department, our advisory group, it’s all about, how do we add value to client relationships and how do we provide world-class client service? So, one of the things that we’re doing differently is to really change the training of our people. We’re training them on how to be trusted business advisors, how to create more industry specialization.
The evolution of company culture at CohnReznick and the importance of corporate citizenship
I think that giving back and making a difference is so critical, and we instill that in our people every single day. As many companies do, we have what we call our core values, and we call them our PYRAMID values. Each letter of PYRAMID stands for our different values. And when you get to the M, the M is for “making a difference.” And what we ask of our people is that we all feel that we’re pretty lucky. When you think about, people in the world today, we’re very lucky in terms of what we’re able to do as professionals. And we expect our people to really give their time, their talent, and their treasure. And we do that in a number of different ways. Each office has what we call a social impact committee. And we basically require that everybody spends time looking at various community activities where we can help people less fortunate than us, and that’s really important.
“you’ve got to treat everybody with the same level of respect no matter what, and I demand that of our people, our leadership.”
And we also have a firm foundation where the partners contribute every year to the foundation a percentage of their earnings. And that money is then used for more of our national charitable giving. And we do a lot of work with the Special Operations Warrior Foundation, the Joe Torre Safe at Home Foundation, Make-A-Wish Foundation. So, we have a strong ethic in giving back to our community.
In the month of June, we have our CohnReznick CARES month. And CARES stands for Community, Advocacy, Responsibility, Education, Service. And the beauty of this is by doing CohnReznick CARES month, it brings all our offices together. So even though we’re in 26 different offices, we’re all spending time in the month of June giving back to various community activities. And we share that across the offices, so it creates a lot of fun, a lot of collaboration. I think people feel really good about themselves. And there’s nothing better than to give back, and I think that really is a strong part of our culture.
On how his personal leadership style has evolved
As a leader, I really try to instill confidence in my team and our firm. You have to show every day that you’re passionate, that you’re willing to listen, and then put yourself in the shoes of the person you’re with. And one thing I really stress, and it goes back to our PYRAMID values, is respect. I think you’ve got to treat everybody with the same level of respect no matter what, and I demand that of our people in our leadership.
We’re all human and I have my bad days just like everybody else. What I try to do at the end of each day is go home and reflect on the day. And there are times I’m not happy with myself and I think could have maybe handled a particular situation better, but you learn from it. I think the biggest lesson I’ve learned over the last almost three years that I’ve been CEO is that you cannot please everyone. Decisions have to be made and you’ve got to make them with all the data that you can get, but you also have to make decisions quickly. You can’t stall a decision. I think you’ve got to be able to put yourself out there and do what’s right for the firm. It may not be popular with everyone, but you got to do what’s right for the firm. So I think I’ve learned to make the hard decisions. And I always try to be inspirational and motivational. And I always reflect on our PYRAMID values, because as the leader of the firm I need to be carrying those values out every single day.
What CEOs should be focusing on in the technology world
Obviously, I think everyone is focused on artificial intelligence and robotics and how does that change the way you do things. So, regardless of the industry you’re in, both of those items are going to have a significant impact on how companies and how CPA firms do business in the future. We’re already seeing artificial intelligence tools that are taking out significant hours from an engagement. We have a lease analysis tool that when you analyze a lease manually, it could take a staff person five to eight hours to do that, where with this tool we’ve developed, we could spend one to two hours analyzing that same lease. So if you have a client with 100 hundred leases, do the math, there can be very significant hours reduction.
And we’re looking at AI in a variety of ways, both from an assurance perspective and how we do certain procedures, especially where there’s a lot of similarity in procedures so that we’re able to kind of provide data through AI tools that allow us to analyze things much quicker, which also means we’ve got to teach our people to be data analysts and really be able to look at trends going forward. So I would say AI and robotics are probably going to impact every single business, and it will catch on really quick.
We just had an owners meeting with about 250 of our partners, and we did a whole panel just on emerging technologies. And blockchain is one of those that could impact a lot of businesses, and definitely will impact the way we audit in the future. Now, we’re not there yet, but when you start to see some of these ledgers that are being created within blockchain, we’re going to have to audit differently because they’ll be able to look at a much larger number of transactions or really 100% of transactions versus the way we do things today, which is more to a sample process. So a lot of changes are going to impact our business, as well as other businesses.