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M orrison, Brown, Argiz & Farra,
LLP was organized in 1969 in Miami, Florida. By 1990 it had grown to 40
people and began to formalize specialty practice groups, most notably
its automotive dealership division, which has a nationwide reputation
for excellence.
Today the firm has 146 people including 16 partners. The
Bowman 100 Special Report
has recognized the firm seven times, including this year, as one of the
country’s top 25 performing independent accounting firms.
We interviewed Antonio (“Tony”) Argiz, managing partner of MBAF. The
firm has grown at an average rate of nearly 14% over the last five
years. In 2004 they expect volume of $23 million. Most of the growth has
been internal and has been in their dominant niches (described later in
this article). Tony Argiz has been with the firm since 1977. While
talking with him, we learned some of the secrets for the remarkable
growth and success of the firm:
• Diversity
and flexibility is the heart of its culture
•
Leadership by example
• Niche
orientation
•
Development of young rainmakers
Diversity and Flexibility
The MBAF
personnel composition is a mirror of the business community, which
includes many immigrants. The business community in Miami has a
predominance of Hispanic and Jewish ownership. In Fort Lauderdale, where
it recently established a new office, there is a large Indian community
and MBAF has an Indian partner there with strong business community
ties. When people see how the firm gives opportunities to those who make
up the majority of the community, they want to join the firm. This has
enabled MBAF to build a high quality staff. Women are also given special
opportunities in the firm by virtue of its flexible work hours, which
allow many women to have families and professional careers.
Leadership by Example
CPA
Leadership Report
has reported on several interviews
with leading CPA firms over the past year. So far we have found no firms
with either an autocratic leadership structure or a hierarchy with
highly controlled accountability. Instead we have found strong
entrepreneurial qualities among the partner groups. The managing
partners in these leading firms are visionaries, rainmakers, consensus
builders, and mentors, but not dictators. Although all the partners
report to him, Argiz, an immigrant from Cuba, says, “I don’t want people to even
think they work for me.
If I want to make a decision, I respect the opinion of the management
committee and will wait until everyone on the management committee is
convinced or they convince me.” He does not control a bonus pool.
Argiz works 3300 hours a year
including business meetings during meals and cocktails and a lot of
community involvement. His personal charge hours are 1700 per year and
the average for other partners is close to 1500. He says there is no
other way to lead than by example. He tries to be a role model for
partners and staff in community involvement, business development,
technical skills, responsive service, and, of course, hard work. He is a
mentor to other partners and meets with them periodically; he “takes
them under his wing” and would like to do this more frequently. Keeping
up with his schedule is a challenge to say the least. He is able to
manage the administrative aspects of the firm by relying on the firm’s
CFO, a CPA with extensive experience in firm administration. They have
an intranet based system that interfaces with their billing system so
they can isolate the ten biggest receivables and ten biggest
WIPS by partner at any time of the month. By having real-time
information, they can avoid falling into traps. They have weekly
information on all departments–what their productive time and billable
hours have been for each staff member, and why they are exceeding or
falling short of standards. They track receipts daily and know the
breakeven of the firm on a daily basis. This system frees up Argiz’s
time. The management committee and other partners handle a lot of chores
so that he can spend more time with clients, rainmaking, and community
activities.
Rainmakers
The firm
tries to identify and develop rainmakers. Many leaders we have
interviewed have reported this to be a nearly impossible task. The
solution, in part, is to hire people with the potential for rainmaking.
Not everyone can be a rainmaker, and to demand it would likely bring
about a fatal diminution of the technical and service skills of the
firm. But about half the partners and many of the managers of the firm
are either rainmakers or have rainmaking potential. “ I’ve worked like a dog to try
to develop them,” says Argiz. “First we develop their
technical skills; then, if they are effective communicators, we try to
develop their sales skills,” he added. They get feedback from
partners and try to develop the good candidates through mentoring and
encouraging them to develop their social skills by active participation
in community organizations. MBAF uses the
Predictive Index
for all new hires to determine
whether they have “sales” potential. If so, the firm encourages them to
get involved in community activities and to participate in programs like
Dale Carnegie to cultivate their skills. They do favor technical ability
over sales ability, but all things being equal, they hire the one who is
the better communicator.
Niche Orientation
MBAF, like almost all of the best
firms, recognized early on the importance of developing service niches
to gain a competitive advantage. Today they have four significant
niches:
Automotive
Dealership . . . . . . . . . . . . . . . . .20%
Litigation
Support/Business Valuation . . . . .17%
Technology
Consulting . . . . . . . . . . . . . . . . .15%
Banks . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8%
MBAF’s
partners have learned that their services can add more value when they
have a deep understanding of the client’s business, and they can have a
deeper understanding of businesses when they specialize in the industry.
Their functional niches like audit, tax, and estate planning, are more
effective because of the knowledge of the industry and, therefore, the
particular client. They are also better able to help the clients with
their financing arrangements with banks and other lenders. While their
automotive dealership services are among the best in the nation, their
valuation and litigation support services are the most profitable. This
niche was augmented recently by joining forces with Peed, Koross &
Finkelstein PA, a fifteen person office in Fort Lauderdale with two very
strong niches–litigation support and health care. This relationship was
strategically advantageous not only because the niche strengths
complemented existing niches in the firm but also because they were
compatible with the firm’s geographic growth strategy.
Conclusion
The strategic
plan for MBAF shows it reaching $30 to $40 million in revenues in the
next five years. MBAF is a learning organization that believes its human
capital gives it an unusual competitive advantage. Its diversity of
personnel is unmatched by any other firm in its market. Its
entrepreneurial culture assures a high level of motivation throughout
the firm. Its efficiency in operations allows partners to have a high
level of charge hours without neglecting the administration of the firm.
And its devotion to learning and mentoring translates into continual
growth of its people.
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