This month, Chris Schmidt takes the helm of Moss Adams, an enterprise with 2,000 employees and record revenues last year of $343 million. The company is the largest accounting firm in Washington and Oregon and among the largest in California and Arizona. It also has offices in New Mexico and Kansas.
EARLY YEARS: I grew up in Norwalk, a suburb of Los Angeles that used to be full of farms. I played in the tomato fields and had a blast. I always had money in my pocket because I would work and trade from the time I was the littlest kid. Some would say shuck and jive. When I was 8, I bartered with the Avon lady around the corner. I mowed the lawn at her house in exchange for this Eiffel Tower bottle of perfume for my mom for Mother’s Day. It was a blue-collar neighborhood. If you wanted something, you worked for it. You saved for it. So business, particularly sales, came naturally.
INFLUENCES: My father was an insurance salesman for Metropolitan Life Insurance. He wasn’t a snake oil salesman. He didn’t sell people things they didn’t need. He and my mother taught me the Golden Rule: Treat people the way you would expect to be treated. And never ask someone to do something you wouldn’t be ready to do yourself.
EDUCATION: In those days, young women took bookkeeping and the guys took auto shop. Few students took college prep classes. I always liked biology, but I didn’t think I had what it takes to be a doctor. But I knew there had to be a different world that I hadn’t been exposed to, so I went to a community college and studied business.
CAREER: I ended up at Cal State Fullerton, where the question was whether I should be in sales or learn a transferable skill. That’s what took me to accounting. What they don’t teach you in accounting school is how much selling is involved.
SUCCESS: The technical side [of accounting] was never my strong suit; I got through it. But what was critical was the ability to communicate well with clients. The selling piece is an interesting dynamic of the whole professional services model. You never try to oversell. But if you take really good care of your clients and they like and trust and respect you, you can do a lot of things for them. I could be their trusted adviser. I was pretty good in sales.
EXPERIENCE: I audited manufacturing and distribution companies, construction and branded clothing firms. They were fast-paced businesses. If you are a branded clothing company and you miss a season, you could go bankrupt. We did a lot of forward planning with them and tried to give as much guidance as possible.
UNDERSTANDING THE BUSINESS: When you talk of the bread-and-butter middle-market clients that are all over our footprint across the West, those clients expect and need the kind of advice we can offer them. You ask them, “What keeps you up at night?” And then you can begin to flesh out the issues. The tax and compliance part is important, but clients also are looking for the value-added piece, the advice. At Moss Adams, we expect our accountants to fundamentally understand the businesses they work with. You have to be able to hit the ground running and provide the services clients need. There is not a whole lot of room for error. We have also always had a healthy consulting practice. We probably have 30 to 35 people dedicated to specialty practice areas like technology, international taxes and lean manufacturing.
CHALLENGES: What keep me up at night are people-related issues. How happy and motivated are team members? How focused are they on truly delivering spectacular client service? Do we have a pipeline of truly exceptional professionals who can grow our business and take care of all client needs? The other side is the regulatory environment, whether in Washington, D.C., or in the states where we operate. Things are going to continue to get more complex. We need to be nimble and smart, and adapt to a changing world.
GROWTH: We are no different from a technology company or a distribution company; we have to grow to stay competitive. We are looking to grow aggressively. If you grow and you are outstanding in your marketplace, you reach a level of dominance. We want to be considered the top middle-market provider in the geographies that we practice in. What that allows us to do is to get opportunities to hire better, brighter students and provide them with better opportunities. It allows us to serve our clients the way they want to be served and to get new clients. This year is our centennial. When you look at what we came through and where we are today, I can’t be any more optimistic.
BUSINESS FOCUS: There are areas like construction, real estate, manufacturing, distribution and consumer products that you have everywhere. Then there are areas where people are incubating new businesses like biotech, e-commerce and clean tech. We want to make sure we have the talent to grow in these new lines of business. The whole CSR [corporate social responsibility] reporting is another new area. We just got our first engagement in that space on the East Coast. You are going to see more situations in the future where a client may not allow you to propose on their work unless you can do a CSR report.
M&A: For the past 10 years, baby boomers have been getting ready to transition their businesses. More and more of our clients, especially family businesses, are being acquired by private equity companies. You have to be able to sit down with owners and talk to them about who they are going to transition the business to. So succession planning is front and center.
DIVERSITY: Fifty percent of our new hires are women, but when you track them to partnership, more are leaving because we are not adapting to the lifestyle and other things that they need as working mothers. We are 73 percent men and 27 percent women, better than most accounting firms, but we need to do better. We also need more ethnic diversity. In California, there are over 15 million Hispanics. We need to adapt to that workforce if we are going to get the brightest people available.