When New Becomes Normal – Business After the Pandemic

HOST Clinton Laron Corporate Communications Manager

GUEST Jenni Huotari Partner-in-Charge  701.476.8728 jhuotari@eidebailly.com

 

The Transcript

Clinton Larson Hello and welcome to EB & Flow. I'm your host, Clinton Larson. And joining me today is Jenni Huotari, Partner in Charge of Business Outsourcing Strategy here at Eide Bailly. Hi, Jenni.

Jenni Huotari, CPA Hello, Clinton. Thanks for having me.

Clinton Larson Thanks for joining us. Maybe you want to tell the people a little bit about what you do here at Eide Bailly.

Jenni Huotari, CPA Certainly. Eide Bailly's Business Outsourcing and Strategy Group is our client accounting and advisory service practice. In addition to payroll, we also provide outsourced accounting, the bookkeeping, up through fractional controller and CFO level services for our clients, which are primarily small and mid-sized businesses, but certainly clients of all sizes.

Those clients generally wouldn't have their own in-house accounting bookkeeping talent, but then would rely on us to fill those roles. Oftentimes so that they, as business owners or management, can really focus on their product or their clients, the reasons that they went into business and really know, have that peace of mind that everything in the back office is functioning as intended.

Clinton Larson Great. And I'm sure that gives you a lot of really good insight into today's topic, which is how changing social norms from the pandemic are going to affect businesses moving forward. You know, it's hard to talk about last year without sounding cliché and no matter how you want to talk about it. But it's also really hard to overstate just how much change was forced on businesses because of the pandemic. And one of the realizations that seems like businesses are making now is that a lot of these changes aren't going away.

Jenni Huotari, CPA Yeah, I would agree with that from both from what we see internally within our own firm to our clients, many businesses sent all of their workforce or most of their workforce to work from home in the last year. In that both proved, one that they were capable of doing that. Some at no sacrifice in productivity or collaboration, but then also built the expectation from an employee perspective of this is great, I'd like to do this more, whether it's full time or part time to some extent going forward.

So I think the expectations for employees working from home will be something that we will see more of. There might be a downsizing office space or a rework of what the typical office environment looks like, maybe more of a shared workspace, more collaborations, less offices and designated individual workspaces.

It also changes the approach for how we approach new talent, where we post, where we're looking to hire from. And on the flip side, also makes us vulnerable to who might be looking for our employees, who might make them offers, knowing that now it's probably not limited to the geography or the competitors like it felt like before. And that pool of talent is opened up not even just across the U.S., but more globally.

Those will be things that we'll have to keep in mind going forward and beyond just the office environment, there might be some changes within your business if you have a production facility and now you've spaced your employees further apart or you've built some sort of partitions or ways to keep them feel more safe now. Will there be expectations for that going forward, as we, I think are probably always a little bit more apprehensive about illnesses going forward, you know, the old days of power through the cold or flu and still come to work and prove how die hard you are. I think those days are probably behind us. No one's going to want to sit next to their sniffling, wheezing coworker anymore, even if we're not in a pandemic.

Clinton Larson You know, and one of the things you brought up, you know, in terms of the working from home in the remote aspect, because those of us who are familiar with working in a typical office setting, we're used to the interactions with our colleagues. We're used to being able to talk to people, you know, in person and just stop by an office when we're walking by and we don't really have that opportunity anymore. So how do you think this is going to affect culture and training and those kind of things, you know, when we're not in person anymore in the office.

Jenni Huotari, CPA I think it will be a challenge that needs to be proactively addressed. It's not something that we can say, oh, we're working on it and we're hoping to get better. I think those are spots where the businesses need to have dedicated resources who see that as part of their job function. Like how do we continually educate or improve our ability to collaborate amongst ourselves to build or continue the culture within our organization, knowing that there is a challenge when not everyone comes into the same physical space, it has a different feel.

I'm not saying it's not something we can overcome, but I think it's going to take some dedicated effort and some actual knowledge, obtaining knowledge, using resources, perhaps consultants to help us get there in brainstorming amongst peers, whether their industry peers or just a friend group who's in a similar situation. We all need to learn from each other how we do this better because it hasn't been something that many of us have focused on before.

Clinton Larson Right. It's definitely been a change for myself. And I know everyone I talk to in terms of how we just communicate on a daily basis. And it's definitely a major shift. And I think one of the things, too, that we're all dealing with is how our interactions with clients and customers are going to change as well. Because, you know, for many of these businesses coming through the pandemic, they were used to seeing their customers in person. They're used to talking to them in person, you know. So how do you think in in an external fashion, how are changes going to impact how we deal with customers and clients?

Jenni Huotari, CPA I think there are a lot of changing expectations for that, certainly in the last year, we became much more digital or those who were much more digital benefited or didn't feel the same negative impacts. If they had made those investments and really had a good product or a good way to serve those clients or interact with them. I think that will continue because now it's become more of the expectation, right.

If you had a great digital experience, you're not saying, oh, now that the pandemic is over, I'm going to go back to how I obtained that information or I'm going to expect to have to go in and talk to them in order to learn more about the product or the service. So I think the investments in that will be important.

There's you know, we look at it, too, from the business aspect. Obviously, those things require some level of investment in order to be able to fund those digital advancements. And there might be some changes too with your consumers or your clients, you know, from a restaurant setting. The expectation going forward might be that the tables are set further apart, that you are given more space or there's more partitions between the dining groups. And that's obviously going to impact how many customers you can serve on a day or what the table turns are.

So that might be a changing business model going forward. If you had previously made financial expectations based on how you'd performed historically, those are probably not valuable anymore. You will need to look at those things in a more critical manner, both from a revenue side. Are you capable of producing that same revenue with the way things have changed?

We talked about a Target example where we've both used curbside Target pickup in the last year, and I have done that. I've enjoyed it. And I will tell you, if I go into Target and I push my cart around, I don't leave until it's full. So I'm obviously consuming, purchasing a lot of things that weren't on my list when I went in there. And that's probably the same for other brick and mortar businesses that the average spend per consumer is impacted when that's all in online or digital experience and you don't have the same benefits of being able to showcase more of your products to them.

Perhaps now it just needs to be done differently. But will that spend per consumer also impact your financial results going forward? And then on the expense side? Do you have more accommodations for your workforce to be able to work for remote, whether it's you invest in more technology or more cyber security prevention, or you just have more PPE or cleaning supplies or other things, Plexiglas partitions? Are there things that you've invested in now or, you know, you'll need to invest in forward that also impact your bottom line?

At the end of the day, we know that the business model for our clients have changed. We want them to understand all those changes that are happening. There's going to be assumptions in your model going forward. And the key will be to look at those assumptions and make sure that there are reasonable or if you need to change something going forward, because the businesses I think there's been a lot of change to businesses, how they interact with clients, what to expect for their results and being as comfortable with those as possible or feel like you understand them will be imperative for our clients going forward.

Clinton Larson That's a good point in terms of the technology and technological investment that businesses need to make moving forward. And as we go to more digital experience across the board, from customer interaction to internal operations, what are some of the things you think businesses are going to have to think about when it comes to this forecasting, this modeling and how they look at their numbers and how they do that in a digital way?

Jenni Huotari, CPA I think all aspects. The expectation should be that there's the cloud-based mentality of I can access my information from anywhere. I need to be prepared whether we're in the office one day or all remote the next, that the information can be both taken in, processed and then stored in an electronic manner that allows us a little bit of a backup or an emergency response if someone's not in.

It also allows us a lot more freedom to work from anywhere, which I think will become at some of the expectations. So we've made a lot of advancements, I think, of how comfortable we are now with virtual meetings. A year ago, not so much. I said in a small group odds were like one hundred percent that in a virtual meeting someone couldn't get connected properly, someone's microphone didn't work or someone couldn't hear. And now we have almost eliminated all of that work.

So we're comfortable there. We've made a lot of advancements. We don't want to take any of those away when they might not be as necessary. We want to continue to accelerate on that pace of change because we've moved so fast in this last year, but I don't anticipate we're ever going to be able to slow down.

The pace of change is going to be high for a while, and that opens up other risks from a cybersecurity perspective. Obviously, all of the data is available to our teams wherever they are. Cyber criminals are also becoming more and more sophisticated and savvy that the new ways of cybercrime change constantly. Think it's critical to work with a consultant in that area.

As a business owner, it would be unrealistic to say that you understand all the areas of cybersecurity and that you and your internal team are prepared to keep your business secure. It's one of the critical components because a disruption or a loss of your data or client data, that's really hard to deal with. And in some ways it can be very crippling for the business. So cybersecurity is something to keep in mind as we make these digital advancements.

Clinton Larson Right. And you bring up an excellent point about change management and how we're going to have to deal with change on a much more regular basis, because this pandemic obviously was a very volatile time. It caused a lot of disruption. But as you said, the pace of change isn't slowing down. It's accelerating. So changes is going to be something we're all going to have to deal with. How do you think or what how do you think businesses should deal with that? What are some of the tips you would give businesses in order to just be comfortable with change happening on a much more frequent basis?

Jenni Huotari, CPA I think for businesses to appreciate the need for some personal development type training or some soft skills training, in addition to the technical skills training that generally happens within a job. I learn how to perform my job. I know how to do all aspects. But there's that soft skill side dealing with change management. Those are things that should be steady parts of training and knowledge and skills enhancement within the business.

Now, as a business owner, I might not be prepared to train others on that, nor are I probably need some training on it myself. I think that's where you want to acknowledge the fact that we're not all good at everything. We do need to use outside parties, consultants or resources or invest in that in some way and be OK with that. I think some training for our teams on change management, whether those consuming all the change or the leaders who are helping determine what changes necessary and the plan of attack for rolling out the change. Those are all critical things that it's OK to not be great at those.

But acknowledging that and getting some resources to help you will make those things more successful. Change is great, you just want to go about it the right way and prepare people. And over the last year, I think we've had a lot of good conversations about mental health and employee needs and all those things that have changed a lot or been exposed perhaps or brought to light more in the last year.

And change management can also impact that area of our employees. We certainly want them to feel comfortable and supported as we ask them to do new things or learn new skills or work within a different process or software. And we want them to feel supported again. We want to maintain or improve our culture as we go forward and make these changes.

Clinton Larson There's a lot of really good food for thought we've just talked about. In terms of, you know, as we look ahead to this year, which right now is looking like it's going to have just as much change as 2020, perhaps, what do you think are some key takeaways that businesses should be looking at? What is the overall goals you think businesses should be looking at this year?

Jenni Huotari, CPA I think overall approaching this year and going forward with the mindset that there is no return to how we were, whether it's your interaction with your employees or your clients or customers. A lot of that change will be permanent, maybe not all of it, but it there will be some permanent changes. So the impact that those have on your businesses, realistically looking at those going forward, how they impact both your business model, the financial forecast, those areas of your business.

And if you need to talk to some experts, I think that's appropriate, too, to understand all of that and really understand the value of bringing in consultants and concentrating on some of those soft skills in addition to your technical skills. It's been a pivotal point of change for nearly everyone over the last year. That change will continue. So you do want your employees and your customers to be comfortable with the change that's coming forward.

So embracing it to the extent you can, knowing that the way things were won't be the way things are. But feeling comfortable and prepared to deal with the change that's happened and the change in the foreseeable future, I think will help set our clients, helps set all of you up for success.

Clinton Larson Great. Thank you so much Jenni. This has been a really good conversation and one I'm sure we'll return to in the future as well.

Jenni Huotari, CPA Yes. Well, thank you. Thank you again for having me. I appreciated the opportunity to chat with you today.