When the Big 4 Accounting Firms Just Won’t Do…

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Neil Parker, MD of Bridgepoint Group, questions the sense of hiring the Big 4.

There is a presumptive behaviour that dominates decision-making in some circles. “If you want the best, you need to hire the “Big 4”. In some instances, that’s grounded in aspiring to achieve more (the business owner), in others it’s no more than arse-covering (the executive).

Here’s the pitch to the decision maker (who may be spending someone else’s money):

“You want the best, so you need to hire the best. It’s an easy, safe decision. After all, nobody got fired for hiring IBM. If you want to grow, you need to reach up. Consider this – we’re an international company, with sheer scale that’s unimaginable. We have teams who will be dedicated to sourcing the best alternatives for your business growth for years. In fact, our technical resources are backed by the best facilities. Our team will scour the globe and talk to advisors in every market you want to reach. India, China, the US, we have contacts to reach out to in those regions, any time. Our contacts are at the arrowhead of what’s happening on the ground in their respective market. We charge out for what we’re worth, and the reputation we’ve developed over our long-established history, shows we deliver results that nobody else can.”

Take a deep breath – there’s a bit of a reality check to be had here.

The staff you’re paying for (at Penfolds Grange rates) have the same qualifications as other advisers. Many Big 4 staff were formerly from smaller practices and vice versa. BridgePoint Group has 30% of staff who have come from large firms because they crave that close contact with their clients and the sense of ‘ownership’ that comes with it.

Meanwhile, massive global organisations are an excellent hiding place for incompetence or professional ill-discipline. It’s easy to shrink back into the shadows and just run with the pack. Even if such non-performance does come to notice, it’s hard to remove an ill-disciplined or unproductive member from a team. Many get moved sideways, from silo to silo, from one manager’s remit to another.

Yep, that’s right. Silos.

You are very unlikely to unlock the (undeniably enormous) collective potential of a Big 4. Why? Because they all have their own targets to hit and remuneration and advancement (politics) is attached to exactly that.

Siloed organisational structures have benefits for the firm.

It’s easier to count the costs and compare the profits from one business unit and assign blame or bonuses as required.

Of course, silos have walls, so whilst the perception may be that there is a strong desire to help your business into a new market with spectacular on-the-ground insights, in most cases that simply isn’t true. If you are referred to someone in another office, there’s a fair chance that the referrer has never even met them, far less they can vouch for them. How’s that for a confidence-inspiring notion? Do you get the feeling that your business is just another transaction?

Despite the cost of the advice provided and the tasks completed within a given silo, the raw truth is that inexperienced staff will probably have done the work. It’s a lot cheaper to have an undergrad process your task, robot-like, without ever asking the “why” question. Tasks done, cost low, profit up.

Big corporations need boxes ticked, rather than thoughts outside the box. Large numbers of talent walk out the door as a culture of ‘idea rejection’ takes its toll. These people know there must be a better way to do things. Smaller firms embrace that thinking as it provides a competitive edge.

Am I here to bash the Big 4?

Certainly not. In fact, there are many things to admire about them. It’s just that I don’t think hiring the Big 4 is the “no-brainer” that some people think it is.

So, before you bust out the purse and shell out the big bucks for professional advice, stop and think.

Who else could do this? What am I really buying? and am I getting true value for money?

For more information contact Neil at Bridgepoint Group.

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