How to “Cloud Accounting” for Tax: Change Management

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View part one of this series here.

Change management is a nebulous concept that people throw around as a necessity when making any major changes. It is a great theory that you can manage the change to make it easier and more palatable for people to accept. The problem is that no one actually ever tells you how to do this in a concise and easy to follow way. Let’s dive into what the fundamentals of change management are, and how to actually build a change management plan before launching a new initiative.

There are three fundamental pieces to any change management plan:

  1. Sponsorship
  2. Communication
  3. Training

Sponsorship

First, if we do not have a committed sponsor for the change, it is doomed to fail. Sponsorship needs to come from both the bottom and the top. When we are looking at a traditional tax firm structure, we need a lead sponsor – a partner on board 100%. This partner needs to commit to being completely supportive of the change. When she has team members in her office complaining about the learning curve, she needs to stay the course and not complain with them. This lead sponsor will need to be resolute in their commitment, communicate how it will help the team, reassure them when it is hard, and enforce it when people try to bypass.

We also need a sponsor at the senior associate or manager level. This sponsor should be the training sponsor and will need to be someone that does the actual work affected by the change. This training sponsor should be involved in the decision-making process, have their voice heard, and also be 100% committed to the change. The training sponsor will be the lead sponsor’s eyes and ears with the team. The training sponsor will be the champion, leading training, and ensuring people at the ground floor get the attention that they need to make the change successful.

Communication

People have a natural tendency to feel reluctant to change, especially if they are unclear about what is happening, when it is happening, and what they are responsible for. The communication piece of a change management plan should be crafted before the change starts.

Open communication in a team is the easiest way to build trust and engage the team in the entire change process. First, the lead sponsor needs to communicate about whatever system or process is being overhauled before any decisions are made on how to overhaul it. The lead sponsor should request volunteers to give feedback on ideas and identify who should serve as the training sponsor. It is always easier if the training sponsor self-identifies and volunteers for the role. The volunteers to give feedback should be formed into an informal focus group team.

Second, a communication plan needs to be drafted, including the key players. Here is the cadence of communication I recommend (which can be how the team communicates or absorbs information best, emails/Slack messages/Microsoft Teams messages/videos:

  • Launch communication including a call for volunteers, identification of the problem, expectations of a solution, and reassurance that it will be phased in and everyone will be trained appropriately.
  • Weekly communications to the entire team affected by the change talking about the progress. This should be done by the lead sponsor until the start of implementation and training, and then the training sponsor should take over.
  • When the new solution is identified, a phased-in change communication with timeframes should be communicated
  • Training plans and timelines should be communicated as well

Third, your communication plan should include a project plan that the whole team has access to. It will morph and evolve as the project goes forward; however, it is key to be consistently updated and accessible by the entire team affected. We use Microsoft OneNote and our project management system to accomplish this.

The communication plan needs to be constantly updated. Communication is the core at which your team will accept the change.

Training

Without solid training, there will be resistance to adoption. People fundamentally fear the unknown. Make the training palatable and fun, with small increments of adoption.

The entire project plan should outline the timeframe for decision on the new solution and when the training will occur. You should schedule the training before you even have the solution identified. The training sponsor should be in charge of this part of the change management plan. The training sponsor will also be the person administering the training and being as knowledgeable as possible on the new system or process. The training sponsor will act as the go-to person in the firm for questions going forward. I always recommend giving the training sponsor a small bonus for their efforts, as they are the glue that will keep the team moving forward to productive change.

Identifying the training sponsor is a difficult task, even more difficult than identifying the lead sponsor. Generally, it is an easy role to be the lead sponsor. You need to be empathetic and not condescending, be in a position of power with authority over decisions at the firm, and be committed to the change. The training sponsor however, needs to encompass many more skills to be effective at their role. Picking someone who does not respond to messages timely, is a terrible idea. Here are some traits that your training sponsor should have:

  • A great rapport with the team
  • The ability to communicate clearly and effectively
  • An aptitude for efficiency, specifically new processes and systems
  • Follow through and a history of completing projects timely

These three fundamentals should weave their story through your change management plan from start to finish. The plan itself should be crafted before you embark on analyzing a new initiative. The most successful plans are continuously updated and take into consideration the busy times of the team. I would never recommend implementing a new tax system for a team launching on February 1, that’s a recipe for disaster! Each lead sponsor should be able to identify obstacles in implementation timing and account for them in a comprehensive plan.

The next part of this series will outline a change management plan template to give you a solid example of how to build an effective plan.

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Liz Mason
Liz Mason is a serial entrepreneur, a giant nerd, and an involved accounting vanguard. She is CEO and Founder of High Rock Accounting, TheDepartment.Tax, and a few other related brands. Liz speaks on a national stage, guests stars on podcasts, publishes a YouTube show (The Hot Accounts), and writes frequently. To further her passion for the advancement of the accounting profession, Liz currently serves as a Xero National Ambassador and as the Content Strategist for Tax Practice News. Liz started her career in tax at Grant Thornton (at 20) and automated a portion of her job landing her in the national tax practice. She spent a decade in large public accounting firms working on highly technical tax consulting before branching off on her own. Liz utilizes her creativity and passion at her company to uproot traditional practices and replace them with innovative concepts. She finds joy in efficient technology and her core belief is that everyone and everything can continuously improve (she says "be better" too often). When Liz isn't planning world domination in accounting, she is a die-hard skier, down for any adventure, plays the ukulele, reads everything, and has a good sense of humor. If you're looking for her, you can find her traveling the world and enjoying new food and cultures with her husband and young son. Follow Liz and High Rock Accounting on Twitter at @LizzyNorMa and @HighRockCPAs.

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