Archive for February, 2011

Times of Austerity

There is plenty of news this week about state governments who are addressing their budget deficits. The State of Wisconsin is headlining with their union busting proposal that the Governor is trying to get passed by the legislature. Here in New Jersey, Governor Christie was applauded with his plan to reduce overall spending, while increasing investments in education. He also very plainly explains the need to not spend money you don’t have. Our governments have been good at this over the past decade or so, and unfortunately we are all now paying for it. With good leadership, I believe we can come out of this fiscal hole, but the pain will be severe and difficult for all of us. In an effort to balance the state budget, funding for services will need to be cut and state employees will need to increase their contributions to health and pension funds.  While these measures are long overdue and necessary, they will provide a drag on the local economy.

The question is whether or not growth in the private sector will be able to overcome this. While  I am optimistic about economic growth over the next year, we all need to continue to be cautious.

The lesson for all of us is to make sure we continue to be diligent in the financial management of our companies. It is easy to think after a month, two months or even a quarter of revenue growth, that we may be on our way to extended growth. This can lead to getting sloppy with expense control. After experiencing a good quarter, I have seen companies suddenly feel they can take the pressure off expense oversight, only to regret it when the following quarter becomes soft. Over the next year or two, we cannot allow ourselves to be fooled into habits we developed in 2005- 2008. We must continue to be diligent and make intelligent decisions relative to investing profits. I put a high priority on technology that will improve employee productivity, and marketing activities that have a clear ROI.

If we are all cautious, we can be successful in continuing to effectively manage through this slow growth economy.



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“The future is not someplace we are going to, but one we are creating.  The paths to it are not to be found, but MADE.” – John Schaar

One thing that I have been very aware of since taking over as CEO is that it is important to be surrounded by talented people. We do the best we can to attract and retain the best and the brightest we can find by keeping an ear to the ground about key individuals who are available in the market place, and by constantly interviewing regardless of whether we have an open position or not. What I have found is that in order to recognize talent during the interview process, you need to conduct many interviews in order to compare and gauge. In other words, we kiss a lot of frogs to find our prince (or princess)!  

Many times the people you are meeting with are not the right fit from a talent or culture perspective. Relative to culture, it is important to find people who are energetic, smart, optimistic, honest, possess a strong work ethic, are a team player, and – most importantly – posses the self confidence to explore and challenge new ideas. The last criteria is crucial because the best way for us to make strategic decisions is to vet out all sides of an idea. In doing so, you can best determine the costs and benefits of decisions we are making and prepare for potential weaknesses of the direction. This will only make the decisions stronger and more effective.

Most importantly, though, is once the people are in place, I need to let them do their jobs. It is important not to micromanage, but to provide direction. Allow people to make decisions and follow their ideas with passion. Of course, there will be times when they make mistakes.  However, there are few if any mistakes that are fatal and it is my role to prevent the fatal ones.

Finally, celebrate success. Whenever we have a successful project, we must get behind the project manager and hold them up as the champion and be their biggest cheerleader. Effectively doing this will encourage more success and allow your talented people to be successful in your organization.

Celebrate we will.


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Looking Forward

I have decided to write a blog as the Managing Partner and CEO of WithumSmith+Brown. The purpose of the blog will be to inform the reader about the events at our firm, and to also discuss my thoughts on management issues as I see them, our unique culture as an accounting and consulting firm and the economy mostly as it impacts our clients and the metropolitan region from NY to Philadelphia.

As we look at 2011 most of our clients are optimistic about the economy and are expecting growth for the year. However there isn’t all good news. The trouble in Egypt has many jittery about oil prices, we are faced with government deficits that are staggering and only can be solved with employee layoffs. This will result in more job losses and the question will be, can the private sector replace these jobs? Only more jobs will truly push the economy into a full blown recovery. Jobs will allow people to get their swagger back and spend money in a way that will give Corporate America confidence enough to invest in capital expansion. As we speak to our clients and visit them for year end, most are optimistic that the worse is over. Anecdotally it would appear that 2 out of 3 are experiencing revenue increases and expect a strong 2011.

In the meantime my advice is to stay the course continue to watch expenses, and invest in top line growth. The latter could be through merger and acquisition or investment in marketing and advertising.

It’s difficult to be anything but generic in a blog like this.  However, if you would like to comment on anything I say in this forum, I will be happy to respond directly.

Related to my opening comments about our firm’s culture, I think the best way to see it demonstrated is through this video.  (And yes – that is me in the beginning.)


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