Peacetime made you successful. Wartime will decide if you survive

For most of the last 40 years, running a tax and accounting firm was a peacetime job. The wind was at your back the whole time, and it was easy to mistake that tailwind as the result of your own rowing. The phone rang on its own and a continuous flow of referrals showed up without much effort. Clients didn’t comparison-shop you or push back on fees because they didn’t know there were alternatives. Compliance work was a moat. It was annual, mandatory, recurring — like your physical and dental checkup — and complicated enough that nobody else wanted in. Most years your biggest problem was capacity limitations because you had too much work and not enough people to do it. It made for a brutal busy season, and a waitlist you felt a little guilty about. But those were good problems to have; they’re peacetime problems.

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In his book The Hard Thing About Hard Things, tech entrepreneur and investor Ben Horowitz explained that a peacetime CEO is the one who runs a company when the market is growing and it has a big lead over the competition. According to Horowitz, the peacetime CEO’s job is to extend that lead, widen the funnel, tune the machine, build the culture and follow the protocol. By contrast, a wartime CEO runs the company when its survival is in question because something is trying to kill it, or the market is moving, or a competitor is closing in. The two jobs require opposite instincts, asserted Horowitz, and the same person almost never notices the day that the weather turns.

From where I sit, I’d say the weather turned on the accounting profession a while ago. Most firm leaders are still running the peacetime playbook in a wartime market. That’s not sustainable. 

Why things were good for so long

Until recently, tax and accounting practices had a huge advantage. The government created demand for those services every year. Clients faced real switching costs and stuck around even if they didn’t feel like they were being served well. Tax and compliance work was hard to compare on price. Your only competitors were firms similar to yours that billed the same way, worked the same hours, and had no more appetite for a price war than you did. It was a comfortable little club of the overworked.

In a status quo world, peacetime strategy is the right strategy. Don’t rock the boat. Nudge fees up a few points. Hire when you can find someone. Protect the culture. Fire the bottom of the client list when you get around to it. Lean on relationships built over 30 years. None of that is lazy. It’s the right strategy until the day it isn’t. Peacetime CEOs aren’t bad at the job. They’re good at a job that’s changing beneath them.

Three simultaneous threats

The seismic shift our profession is undergoing isn’t caused by a single threat you can name and beat. It’s the product of three big changes hitting a different part of the business simultaneously: What you sell. Who you compete with. Who you serve.

1. What you sell. Let’s face it, the work we do has become cheap. The moat around compliance work — annual, mandatory and difficult — has cracked. Software and AI are eating the bottom of the return. What used to take a preparer two hours takes 20 minutes, and the client is starting to suspect it. When the thing you sell can be done faster and cheaper by a tool, it stops being a moat and starts being a line-item expense that clients start to comparison shop.

2. Who you compete with. One day you blinked and your competition stopped looking exactly like you. Now competitors come from outside the profession. Private equity is rolling up firms, going after your clients and staff, and putting real marketing muscle behind their offerings. Fractional CFO platforms and fintech shops are pulling apart your best-margin services and selling them to clients one piece at a time. Meanwhile, wealth managers and RIAs are bringing tax work in-house because they realize the trusted advisor is no longer the CPA by default; it’s whomever sees the client’s total picture. Increasingly for clients, it’s no longer the person “who does my taxes,” it’s the person “who runs my complete financial life.”

3. Who you serve. The client now holds the information. They’ve read what you’ve read about tax rules. They know AI exists, that fees move, that other models are out there, that “my accountant has always done it this way” is not a plan. The information gap that covered the average service is gone. Now, a client can drop their completed return into AI and it will show them any planning issues you missed.

Cheaper work, competition from outside the profession, and a client who can finally see the whole board. The market is shifting, the competition is closing in, and for many firms, the survival of the current model — not the firm but the model — is a real question.

This is wartime.

The instincts that made you successful are now the risk

During peacetime, your instinct is to get every partner to agree on something before you change it. Peacetime urges you to keep everyone comfortable. But comfort is how firms lose their best young people to competitors offering them a real future. Peacetime urges you to keep raising prices a little (without delivering more value) and add a service line only when there’s room. But during wartime, somebody else has already decided what business you’re in. The marginal client, the underpriced engagement, the partner who stopped growing 10 years ago, all got carried because there was always enough to go around. 

The wartime CEO intentionally breaks the rules the peacetime CEO spent years building. Legendary Intel CEO Andy Grove transformed the company from a memory chip maker into the world’s leading microprocessor manufacturer. Steve Jobs came back to Apple and killed product lines and people’s pet projects. Not because they were bad, but because the moment came down to one question about survival, and anything that didn’t help answer it had to go.

So, here’s the wartime question worth sitting with: What business are you actually in? If the honest answer is “I prepare returns and file them accurately and on time,” you’re defending the one hill the market has already decided to take. However, if your answer is “I’m the person who sees my client’s whole financial life and owns the outcome,” you’ve got something worth defending. But only if your firm is rebuilt to deliver it. Most firms aren’t. 

What now?

This is a warning that many very good firm leaders are about to get caught flat-footed by their own competence. They got so good at operating during peacetime that they can’t hear the battle cries of war coming.

Stop measuring yourself against the firm across town that runs just like yours. They aren’t the threat. They’re going to lose the same way you will. Measure yourself against the software company, the RIA, the PE platform and the fintech that are all redrawing what clients expect. Decide which of them you’re going to become before one of them decides what’s left of you to buy.

The firms that win over the next decade will be the ones willing to admit that the job has changed and are willing to change with it. The war started a while back. The only question left is whether you keep running it like peacetime until somebody else writes your obituary for you.