Written by Bill Fishburne | Photos by Anthony Harden
We haven’t seen it yet, but it must be coming; and when it gets here, it’ll be a whopper. It will be the bill for taking the better part of an afternoon out of the life of Ken Hughes, CPA, chairman of Dixon Hughes Goodman, LLP, to get the data required for this article.
Dixon Hughes Goodman (DHG) is the South’s largest financial services (accounting) firm. It is headquartered in Charlotte and has more than 30 offices in 12 states. It is also the 16th largest accounting firm in the United States and has international reach through its affiliation with Praxity, which is a nonprofit association considered to be the world’s largest alliance of accounting firms.
The time of its chairman is a valuable commodity, and Hughes gave generously.
According to the Accounting Today 2014 survey of the nation’s top 100 accounting service firms, DHG had 2013 revenues of $310 million. By common standards it had a near-ideal fee split of 36 percent from accounting services, 35 percent from tax services, and 29 percent from management advisory services. It is also a firm that keeps management close to its clients with 1.74 partners for every $1 million in revenue. That means it’s not hard to talk to a partner at DHG, including Ken Hughes.
Hughes is an alum of Western Carolina University, an entrepreneur-leader, a business builder, and a father. He asked that this article not be about him because the company’s success and growth is about the DHG people, not any one individual.
Understood. But when you go back to the company’s North Carolina origins, there is just one man—Ken Hughes—who has consistently been at the helm. He has had many of the ideas, established the relationships, and put the right people and programs in place to consistently grow the firm. Clearly too, he has a passion for the company and especially for its people.
You have to rethink what you know about the word. It flows off Hughes lips sweetly, like Sonny James singing Young Love. He gives it richness and meaning you won’t get from Merriam-Webster, and all the while he’s looking you in the eyes to make sure you understand how important passion really is. The way Hughes uses the word, well, it’s just not in the dictionary.
“If you don’t have a passion for what you do, you will not be successful,” Hughes says. “It’s part of our guiding principles of innovation, trust, relationships, and passion. When I teach a class to young people, I say find your passion. If you find it, you will be very successful and you will enjoy what you’re doing. I was fortunate to find mine many years ago and to build it into my life. In my experience I have found that if you enjoy what you do, if you’re passionate about your people’s success and their careers, and helping your clients in achieving their goals, then you’ll enjoy what you do. So passion is about work-life balance. It’s all about having the passion to do all those things and not burn yourself out.”
His passion extends well beyond DHG. He is married to Jane, and his daughter, Lauren, attends the University of South Carolina. Throughout his career he has been passionately involved in his community. When he first came to Asheville he was invited to join the then-new Asheville Breakfast Rotary Club. Those early connections led him to service on a multitude of boards, commissions, nonprofit organizations, and professional associations. If you’ve lived in Asheville during the past 30 years and are active in the community, there’s a good chance that Hughes was on your board, is on your board, or might be on your board if you ask him.
As Hughes relates it, the most wonderful thing about DHG is the people of the company and the teams of professionals it offers to serve its clients.
“What I love most about this business is recruiting people and having them be successful. I love having an organization so capable that I can look a person in the eye and say, ‘If this fits you, you can have your entire career here.’ It’s really watching people develop through the years. I look at many of our leaders today, and I remember the day I recruited them right off the college campus. Mike Crawford, for example, who leads our Carolinas Division. I remember the day he started. David Wiggins, too, the partner in charge of our Asheville office. These were bright, bright young men at the time, and I have been privileged to see them grow.
“We work together and share our key values, especially our relationships and passion for our work. It’s about achieving a work-life balance and helping our clients achieve their goals.”
The beginning of Hughes career dates back to Western Carolina University in 1974, where he graduated suma cum laude in business administration and accounting. From college he joined the prestigious KPMG accounting firm, where he spent six years learning the business until he decided to carve out his own future working in the Lindsey & Crisp firm back home. At that time, Lindsey & Crisp had offices in Waynesville and Sylva. Hughes thought that to grow the company they would need to have an office in Asheville, the region’s financial and commercial center.
In 1980 Hughes rented an 880-square-foot office on the 15th floor of the Northwestern Bank (now BB&T) building in downtown Asheville. It had a sign on the door and a carpet on the floor, but no clients.
“That turned out to be one of the best things I ever did,” Hughes recalls. “Being in the BB&T building put us in the center of Western North Carolina’s business activity. I signed the lease with no furniture and no clients. I went over to Hoyle Office Supplies (on North Market Street) and bought some furniture from Mickey Hoyle. Then I had to go find some clients. I was hungry, and hunger is a great motivator.”
“We were fortunate in our first year to have $250,000 in revenues,” Hughes recalls. “In that first year, I attended lots of meetings and met a lot of people. I found out that I was a sponge for leadership. I would go to courses on leadership and listen to anyone who would talk to me about it. The thing I heard over and over is that business leadership isn’t about genius, it’s about execution. That, and surrounding yourself with really good people. Companies really only have two assets: their people and their clients. Put your people ahead of yourself, enable them to serve their clients and grow in their jobs, and you will be successful.”
Accounting Today also reports that DHG had 1,600 full-time equivalent employees and 178 partners at the end of 2013. Hughes says the firm now has over 230 partners, more than 1,800 full-time employees, and has grown with additional services in the past year. As with many other large professional services firms (accounting, legal, engineers, advertising, and such), most of the growth was accomplished with one very successful and stable company acquiring other similar firms whose values, capabilities, and approaches were in some way complimentary.
“I never had a grand plan for growth,” Hughes says. “This company today, what we have achieved and the wonderful people I get to work with every day, just completely exceeds my wildest expectations.
Despite the disclaimers, in 2004, the year of the merger between Dixon Odom and Crisp Hughes Evans, Accounting Today listed Hughes among the 100 most influential people in accounting. He was nominated again in 2006.
“To grow you have to find people of like mind. We were fortunate to do that through the years, bringing in some small practitioners and expanding our base of clients. In 1990 I believe we had $10 million in revenues.
“One of our big steps came in 1996 when a friend asked if the we had any interest in the Atlanta market. He said there was a company there, Evans Porter & Bryan, that did many of the same things we were doing. They were working on a much larger scale because of the size of the Atlanta market. We worked it out and merged. Larry Evans was their CEO at the time, and we became Crisp Hughes Evans.”
In 2004 Crisp Hughes Evans merged with Dixon Odom of High Point to create Dixon Hughes PLLC. That merger brought Crisp Hughes Evans and Dixon Odom together with Eddie Sams and Ken Hughes working together as co-CEOs of the new firm.
“Working with Eddie has been a wonderful experience,” Hughes says. “I would never have had the opportunity to do that if we hadn’t had companies with so much in common. Our cultures, our goals, our interests, the way we worked, it was just a natural fit.
Sams was instrumental in the formation and leadership of Praxity AISBL. He has also been extremely active in national leadership in the American Council of CPAs. In addition, Sams has taken leadership roles for numerous civic, nonprofit, and scholastic organizations.
The firm’s next big step came in 2011 when Dixon Hughes merged with the Virginia-based Goodman & Company LLP to form the present-day company, Dixon Hughes Goodman. The Goodman firm was founded in Norfolk, Virginia, in 1932 by Lu Goodman and Vernon Norman. As with Dixon Hughes, a series of mergers followed that grew the firm into Richmond and Virginia Beach.
As with any other business, the bottom line is clients. How well does a company meet their client’s needs? DHG attempts to do that by finding clients who have their own system of values. Hughes says that is a key factor in making a good working relationship.
“We try to find clients that have their own values within their organization. They understand what is important to them. Another part of it is they need and value their professional’s advice. They have to value what you bring to the table to help them be successful. Certainly a client that’s profitable makes for a good client, and hopefully we help contribute to that client’s success. But that’s not the only factor.
“In many cases a client wants to sell or acquire a business, to do a transaction. We’ve done these transactions many times before. But for most of our clients, it’s their first one. We also try to help them through the life cycle of the firm. It could be a leadership change, a new generation. We just went through that. The issue is, as a professional, how do we help the client through the change?”
DHG also realized some time ago that they could be of better service to some clients by helping them in the realm of wealth management.
“There are some things we can do better than anyone else. But for what a small organization needs, maybe they don’t need us in traditional roles. To address this we started our wealth management division. We help young clients manage their money and we love to help them with their personal financial planning. We try to add value to our clients as well as a perspective they might not have. We might have a $500 a year client and a $500,000 client. It’s all about how we can help them. We have folks that our team leaders can call in to provide the right advice and service to just about any size organization.
“We organize into teams. Our partners are team leaders. There’s no ‘i’ in team. We believe we can help clients best if we bring the right team to help them. We bring the right levels of expertise and personal service. The partner has oversight to make sure we have the right team, the right people. These teams are flexible. We could bring in people from Charlotte or Atlanta, for example, to consult and work in state and local taxation. You can’t have these specialists in every office so we bring in the expertise we need for what that client needs.
“It’s not a cookie cutter approach, and it’s not an ‘I can be all things to all people’ approach. That’s what we mean by ‘no ‘i’ in team.’ The partner on that account has to be a quarterback deciding what plays need to be run for that client and what level of person do we need to make sure we add value to what that client needs.”
WCU and Coach Bob Waters
“During my time at Western, the school was blessed to have a great coach and leader in Bob Waters. He died from ALS, the Lou Gehrig disease. I suppose that was the first most of us ever knew about that disease. I remember how successful the football team was when he was there, but Coach Waters’ largest contribution may well be the example of courage he gave us as he struggled with ALS. I think of him a lot because one of our partners, who started our health care division, retired and was diagnosed with ALS.” Ken is talking about Larry Hughes (no relationship to Ken Hughes), a recently retired partner from Winston-Salem, who was also diagnosed with ALS earlier last year and passed away in November. DHG had a firm-wide ice bucket challenge in his honor to help raise money for some external funds in his name. “I wear a bracelet to find a cure for ALS. It’s on my mind a lot.”
Among other jobs, Hughes continues to serve as a member of the management board and governing council member for Praxity, the world’s largest alliance of independent accounting firms. Praxity is considered the world’s largest alliance of accounting firms. Member firms have more than 610 offices world-wide in 97 countries.
“So many of our clients buy or sell or have operations globally that we found we needed a way to help them. That’s what Praxity is all about,” Hughes says. “Through Praxity, we’ve formed an alliance of independent like-minded firms that meet rigorous standards. We help our clients find these firms they can work with across borders and wherever they might have needs. You can’t be a member by just saying I want to be a member. You have to go through certain quality standards, and you have to do it every third year. It is very helpful when I’m calling the Praxity offices in London and have a client with an opportunity or an issue. I know I’m calling someone who will take my call and will treat my client, or clients, as importantly as they would a client that was just down the street from them. Being a member of Praxity is very important to our firm and to many of our clients.
“Another example is if you want to establish a plant in Latin America, through Praxity we can call and put you in touch with a someone that can walk you through the steps you need to take. You don’t have to learn how to do it by trial and error.”
Regarding the Future
“One of the challenges we’ve been facing is the millennials. How do we effectively work with them. How do we understand them and they understand us? They’ll be our clients and they’ll be running the firm. The approach we’re taking keys around our core principals of trust, innovation, relationships, and passion. We used to say it differently, that it was about people, and it is. These are enduring principles, but every now and then you have to restate them to refresh yourself and others, to make sure they reach the new generation.
[quote float=”right”]”It’s about surrounding yourself with strong leaders. We look at leadership as a collaborative effort. What we try to do is get the right leaders in the right seat on the bus. We want to use their skill sets instead of trying to say this person has to do that to be next in line.”[/quote]“Matt Snow took over CEO duties for the company on June 1st. He even has a blog. Matt’s about 50 years old, and he has new ideas. He won’t be doing things the way I did. The process of selecting the next CEO actually started in 2008, when Eddie Sams and I kind of figured out we weren’t getting any younger and we needed to look for a successor. We changed the organizational structure a little bit in our minds to allow a lot of new, younger leaders to have a chance to lead practice units and industries, and Matt was one of those.
“Part of the process was determining what we wanted in a new leader. We went to all the partners and talked to them, and did road shows asking questions and listening. We asked what skill sets do you need. Matt really responded to their needs. I could not be happier with the partners’ selection. The good thing though is the partners had multiple choices. Part of leadership isn’t about one person, it’s part of a leadership team. And just as I’ve been privileged to be CEO and co-CEO for a number of years, in the end it’s not about one person. It’s about surrounding yourself with strong leaders. We look at leadership as a collaborative effort. What we try to do is get the right leaders in the right seat on the bus. We want to use their skill sets instead of trying to say this person has to do that to be next in line.
“We’re strong outside the CEO chair as well. Kent Satterfield is our chief operating officer and incredibly talented at what he does. All of these leaders, Martin Schlaeppi, who is over our client services, and Mike Crawford here in Asheville, who runs our Carolinas Region—I could keep going—it’s about building a leadership team.
“I was fortunate and privileged to be part of building the company. This isn’t about me, it’s a team effort. I don’t want to read an article about how I built the company. It was our team that did it.
PERSONAL INSIGHT: Ken Hughes
How do you find time for yourself?
It is hard to stay in balance with your personal and professional lives. If you’re not passionate about what you do it becomes drudgery. I worked hard to make sure I didn’t miss many of my daughter’s games in high school. Those things are important. My Mom and Dad worked hard all their lives, but I remember they were always there for my games. They instilled values to me, and I hope to pass those along for her.
When you do get private time for yourself what do you do?
If you could have put more time into one outside organization or program, what would that have been?
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