SC&H Group is a firm built upon the belief that talented, driven, and dedicated individuals can produce work so extraordinary they will have a meaningful impact on their clients, colleagues, and community. That’s why the firm is ecstatic to be named one of the nation’s Best Workplaces for 2018 by Inc. Magazine.
SC&H Group was the only Baltimore-area company to be featured in the magazine’s “large company” category and joins eight other Maryland-based companies on the list. Out of thousands of applicants, Inc. singled out just under 300 winning companies. Inc. highlighted SC&H Group in its June “Best Workplaces” feature for its employee benefits, including annual company trips, its ESOP (Employee Stock Ownership Plan) offering, and days off for volunteering.
So what does it take to become a company that professionals want to be part of? Our latest Now to Next Podcast features Ron Causey, Co-Founder and CEO, Mike Young, Director of Audit Services, and Patrick Gahagan, Director in our Contract Compliance Audit Services practice to get their take on why SC&H Group is one of Inc.’s best workplaces.
Sarah: We’re thrilled with this honor. We’re thrilled with this award. I think it’s incredibly well-deserved. And we want to talk a little bit with these leaders in our firm about how we got to this point and the value that our employees have found working here, and where we’re going.
One of things that was interesting to me about this award was the key themes that emerged when “Inc. Magazine” was interviewing firms for the award, the first being company culture. Strong company culture is breeding excellent results. And I can’t think of anybody better to talk to about SC&H’s company culture than our founder and CEO, Ronald Causey. So Ron, talk to us a little bit about when you founded the firm, did you have this culture in mind and from the get go, how did you establish it and how have you maintained it?
Ron: Sure. Thanks, Sarah. Well, I believe that we always thought we had a vision of a different kind of firm. And that was one where we actually really truly cared about the people. We also, when we started, knew that we needed to take care of the clients, because we had none to begin with, and we had none for the first two or three months, and if we were to effectively compete in the marketplace, we knew that we had to take care of them as well, and first and foremost. So it really all started with that original vision which was really… We came from a national firm, great firm, great people, but it was a little different as it related to the quality of life type of issues, and we thought we could build a better model where we really truly took care of the folks.
Sarah: That’s interesting. I mean, a lot of companies talk a good game about culture. How do you know? How do you know that you’re doing the right thing and employees are engaged and everyone’s in alignment? As companies grow, I feel like it was probably difficult to maintain that culture that you started with. How do you know that you have success?
Ron: Yeah. Good question. It requires ongoing maintenance and it’s different. When we first started, we were 3 people, then we were 5 and 15. And when you’re 15, you could all be around in the same room together. We’re all developing each other and communication just kinda flows naturally because we’re all together.
As you evolve, as you get bigger, it becomes different and more challenging, but I think if you maintain a focus, you can still maintain those wonderful kinds of cultural aspects of what we’ve been able to create, but it just comes in a different form. So it really evolves around communication. How do we…we have a firm meeting, we talk about who we are quarterly. We try to communicate other ways, whether it’s happy hours, whether it’s a firm trip. So all of these things, it just requires absolute attention. And we also have to know that it’s different.
Probably, the most important thing we did was we have a Culture Committee. And the Culture Committee is tasked with making sure that we maintain this culture. So we are focused on it. And I think as long as you remained focused on it, I’m not saying that it is perfect, but I think when you are focused on it and have really bright, young folks that are really trying to, again, maintain that culture, that it can happen.
Sarah: Talk a little bit about the clients and you joked that we didn’t have any for a couple of months. That certainly is not an issue at this point, but I think serving clients is obviously one of the most important things that we do and we do it well. How do you instill that? How did you instill that in the beginning and how are we still maintaining that top-tier level of service today?
Ron: When you have no clients and when you get your first one, and when you understand that people’s houses are on the line, it’s funny how in tune with how important client services from the inception of the firm. So we were very focused because we needed, frankly, the money. And if we weren’t that focused in a very competitive world, which it is, we were not gonna win. There was very few people that knew who we were, so if we couldn’t differentiate ourselves, and I guess, probably that leads into, really, the easiest way to think about us is clients, colleagues, community. Those are our pillars and those are the things we try to focus on and we focus on them each and every day in meaningful ways. And ultimately, we believe we’re doing a good job, we are focused on it, but how does one test that, back to your question.
And we’ve surveyed our clients, for example. We’ve used net promoter score, which is a nationally recognized way to survey your clients. We scored an 84. The only thing I don’t like about that score is it sounds like a B, when it’s really an A+++. Accounting firms, on average, score 31. We have won… That’s the client side.
Colleague side, we measure that by…survey our clients, we’ve won numerous awards, again, “Inc. Magazine” is just the latest example of that, but we’ve won many other awards. We’ve been selected as the number 1 CPA consulting firm in the entire country to work for. We’re very proud of that. So again, we measure what we’re doing.
Community service, we measure that in the form of each one of our employees, in average, donates 27 hours a year to community service type activities. That’s a big number. There was an article with IBM a few years ago that I saw where they were committing about 9 hours per employee per year. So we’re doing three times that. So again, you have to measure it, you have to monitor it, you have to have some ideas and listen to people about how [inaudible 00:06:36].
Sarah: All these three elements, they sort of feed into each other, right? So you have engaged employees who are happy working here because they’re in touch with the community and they’re in touch with the firm’s values, so they do a better job of serving clients. The clients feel that love and it’s a self-fulfilling prophecy. All three of them feed to each other.
Ron: Sure. It is all interrelated. This is by design. We don’t work our people to death because if we don’t work them to death, they’re happy. Happy people are more productive, more efficient, and they provide better service and our clients love them. And they stay and our turnover’s a little lower. So all these things are intertwined and it’s very intentional.
Sarah: That’s good. As an employee here, I feel it. So that actually is an interesting say. I’m gonna talk to Mike a little bit about your experience here, because short of Ron, you’ve probably been at SC&H the longest. What have you seen in terms of evolution in culture and how have we managed to stay true to the course over all of these years, particularly with the rapid growth that we’ve experienced.
Mike: Ron’s right. When I started at the firm, I think there were about 13 or 15 employees and we would all fit around the conference room. And we did, on a regular basis, we would have weekly meetings to talk about what was going on within the firm and we focused a lot of our business development efforts. Now, with 270 employees, we don’t have a conference room table quite large now to seat us all. And so as Ron said, we try to basically maintain the culture by having it trickle down from leaders of the firm. Leaders of the firm constantly stress the importance of maintaining a very positive employee-centric, client-centric culture throughout the organization.
And it’s done in a number of ways, but it’s mainly just walking the talk. And so when we’re looking at, for example, the employee side, we’re looking at chargeability reports and overtime reports. We’re not looking at overtime to make sure our people are working enough overtime. We’re making sure our employees aren’t working too much overtime, because we do want to maintain a good balance between work and personal lives. Happy employees provide superior client service, which results in happy clients. And so we continue with this and that.
And on the client side, the focus is always to be not only very responsive to our clients and to their needs, but to be proactive and so we’re constantly looking for ways in which we can add value to our relationship with the clients and help them improve the success of their businesses. And we do that regardless of the type of service we’re providing, whether it be tax compliance and consulting, whether it be a financial statement or audit, whether it be risk management, we’re always trying to give above and beyond just delivering the compliance services or the consulting services, looking for other opportunities to add value to those relationships, and therefore, further strengthen, you know, our ties to that client.
Sarah: What about, over the years, can you pinpoint any key milestones or moments or turning points that you thought, “This is a big moment. This is a big moment for SC&H and I see great things going forward,” or “I see a shift in where we’re going.”
Mike: Probably one of the most important decision we’ve made since I’ve joined the firm is we decided to implement an ESOP back in 2006. At that point in time, we basically sold 30% of the company stock to the ESOP so that all of our employees are owners of the business. And the reason we did that is because one, we wanted to continue to foster the ownership mentality of our employees in our business. And we had done that a number of ways prior to implementing the ESOP through various incentive programs where employees share in the success of the firm. But as owners of the firm, there is a direct benefit to them as a result of the continuous success of the firm.
The other reason we did that is Ron and myself and several of the other owners of the business are all similar age. At some point in time, you know, we’re gonna exit the business, and what you see is other firms in that situation are almost forced to sell to a larger firm so that they don’t saddle the next generation of employees and leaders with these unfunded retirement or buyout liabilities. By implementing the ESOP, we have now eliminated that and so it basically insures that there’ll be continued continuity of ownership, meaning our employees continue to own this firm indefinitely.
In fact, we did the initial ESOP transaction in 2006, ESOP gained some additional ownership as some of our former shareholders left the firm. And then in 2016, we did anther transaction where the ESOP purchased the remaining shares from the individual shareholders. So now, we are a 100% ESOP-owned company, which is providing significant benefits to our employees, above and beyond their compensation that they receive through salary bonuses and above and beyond what they get through the 401(k) plan.
Sarah: Well, I can tell you, as an employee, we are grateful and we like this setup. I think we all feel value here and see the importance of this and the stability that this brings to the firm. So it doesn’t sound that this is a very common scenario for the way businesses are run, so we’re lucky to be here.
Mike: It’s not all that common. All businesses, it’s extremely uncommon with public accounting firms. I’m not aware of any other public accounting firms that are 100% ESOP. There is a very small number of public accounting firms that have sold a minority of their shares to the ESOP. So I think we are very unique in the ESOP ownership structure that we have.
Sarah: Okay, so that’s good to know. And I think an interesting time to talk to one of these next generation of leaders that you mentioned when you were describing the ESOP, so Patrick, you had been here since 2002, started as an intern and are now a director in the Risk Management practice. It’s a good story, and obviously, the employee engagement element of the firm culture is working. Tell us a little bit about your story and the entrepreneurial culture that’s helped you grow in your career here.
Patrick: Thanks, Sarah. Yeah, when I first was introduced to SC&H a long time ago, I was immediately attracted to the culture here. And the thing that really stood out for me, listening to Ron talk about when he founded the firm over 27 years ago and not having any clients and the amount, when he did get clients, and now we have thousands of clients, but at the time when we didn’t have any and when we first got them, the amount that we cherished those clients and were really focused and to see that we still have that same focus and we still cherish those clients in the same way, that’s so important. It’s a Day 1 mentality. And the entrepreneur spirit that we have here and the way that we reward initiative and responsibility, I mean, it’s something that you can feel. And even when I was very young and still in college, I could see that. it was different from other professional service firms. So I was immediately attracted to that.
Having joined the team and progressed my career, it really…when Ron talked about the 3 Cs, I mean that’s why I enjoy working here. We are a professional services firm, we have to be client-focused. If you’re not client-focused, you’re not gonna be successful. So you have to be. And in order to successfully deliver those services, you have to take of the team members that are doing that work. And so that’s where, you know, having a good work environment and colleagues is so important. And guess what, if you are client-focused, and you’re taking care of your colleagues, you’re gonna be supper successful. And we have been. And that’s why we think it’s so important to give back to the community and support it, not just in terms of time and money, but encouraging folks to be on boards and participate on it. When I look at, collectively, what some of the employees here are involved in, I mean, it really blows me away, the various organizations. All of the major charities in this area, people are a part of, and a big part of their success. So it’s cool. This community has given so much to us, and we need to give back to it and I’m proud to be a part of the team that does that.
From a how has that progression been, you know, from an intern to a director, I mean, it’s been a series of challenges and adventures. One of the things I really like about our culture is we’re always focused on helping people develop, develop their skills and take on more responsibility. So even as an intern, people were helping me learn the skills that I needed to be a successful fulltime staff. And when I was a fulltime staff, people were focused on helping me develop the skills I needed to be a successful supervisor. And as my career started to advance, I quickly learned that I had to be doing the same thing. So I had to be helping, as a staff person, I had to help interns learn how to be a successful staff person. And as a supervisor, I had to learn how to help staff people be successful supervisors. And so a whole lot of my time was helping people learn how to do my job.
And what I learned is once I was able to do that, it freed up my time so that I could learn how to do the things that the people I reported to were doing. And basically, I’ve just been continuing to do that for the last 17 years. Now, I’m doing my best to learn the things that Ron and Mike are doing, and at the time, work with people on my team to help them learn the things that I’m doing so that we can all continue to advance. And I think if we keep doing that as a team, the potential to continue doing really impressive work is unlimited.
Sarah: I think that’s a great way of describing the embodiment of the leadership of this firm. Mike, you brought this up yourself, that is has to start at the top and trickle down. And I think the way you describe that, of making sure you take the time to pass on not just the technical knowledge, but the culture, to the younger folks, the people coming up the ranks, is how we will continue to grow but maintain this important culture that has helped us be more successful.
So I guess my last question is how do we keep going? You know, talk to me, Ron, a little bit about what’s next? How are we gonna win this award next year and continue to do better?
Ron: It’s keep trying. Keep trying to improve. I think one of our finest qualities over the years is we’re never satisfied, so we’re not satisfied. So it’s great that we won a training award, best place, a couple of years ago, for training, number 1. We’re not satisfied in any way, shape or form in training. We’ve talked about career development and then ultimately, do we have a career development coordinator, as opposed to the way we’re doing it right now, where we’re laser-focused. We are laser-focused now, but how can we get better in doing each and every thing that we do.
And look, it’s a challenge, but it’s also what makes work interesting and fun. We look at… There are a lot of challenges the accounting industry faces and some people call them challenges that scare them. We view them as opportunities. We’ve always embraced the entrepreneurial spirit. We’ve always embraced starting new service lines. We’ve always embraced what are the biggest needs that we’re seeing that our clients are facing in the world and marketplace today and what can we do…that went to the context of what we can do with the CPA consulting firm. What can we do to help solve those biggest problems? It’s great that we do audit and tax work, and we’re really, really good at it, by the way, and better than everyone, by the way, but if we can solve other problems, then it’s a natural that we’re gonna do the audit tax work.
So for example, we have a new group, Technology Advisory, so we have a group of CIOs who were focused on what are the strategic technology initiatives that your business needs to be successful. Those are big issues. We’ve had the same issues. We had to solve them ourselves. And we have. We had through the use of really high-quality people that can help us navigate those troubled waters. We see many opportunities in AI and BI and innovation and we have an Innovation Committee now. So these are all, what we consider to be tremendous opportunities in a world of dramatic change. And this world of dramatic change, it doesn’t scare us. We’re excited about it. That is opportunity. It’s opportunity for us as a firm. It is opportunity for our people to grow and navigate and to be…continue to be really successful. That’s what would get you up in the morning and get you excited. And if you don’t have that kind of environment, eh, that’s… I don’t know. I’m glad that doesn’t exist here.
We’re never satisfied. We pat ourselves on the back, we’re proud of what we’ve been able to accomplish, very proud, humbled by it all, but never satisfied. And I don’t mean that in a bad way. I mean it in a really good way. What can we do better?
Sarah: I think that’s great. And our clients appreciate it. I know we employees here appreciate it. And onward and upward. Thank, guys, very much for your time today.