CA CPA Spotlight: CalCPA CEO Says Learn from Tech, Change, and the Next Generation - Part 6

Denise Froemming [00:00:00 - 00:00:34]

And one of our values, because we just did our values, is curiosity. I think that is key, and the ability to innovate and not just have the top-level people, even the mid, mid-tier. Everyone has to have that ability to see what they're doing, how it makes sense, how it plugs in to everything, and to innovate.

So, I think that has to be everywhere in the organization, which before it wasn't, right, but it's, it's truly important. And I would say the technology. So, the digital transformation, leaning into AI, using the tools to help differentiate yourself.

Announcer [00:00:34 - 00:00:45]

Welcome to Paychex THRIVE, a Business Podcast, where you'll hear timely insights to help you navigate marketplace dynamics and propel your business forward. Here's your host, Gene Marks.

Gene Marks [00:00:50 - 00:01:06]

Hey, everybody, it's Gene Marks. Welcome back for another episode of the THRIVE podcast from Paychex. We are here talking to Denise from, Denise is the president and CEO of CalCPA. First of all, Denise, thank you very much for joining us.

Denise Froemming [00:01:06 - 00:01:08]

Oh, it's a pleasure to be here. Thanks for asking.

Gene Marks [00:01:09 - 00:01:28]

Sure. And, you know, I've said this to others that I've spoken to your colleagues, compatriots around the country at different chapters, just tell me a little bit why you call yourselves CalCPA instead of like society or chapter or institute. Is this just something that's been done for the past 300 years?

Denise Froemming [00:01:28 - 00:01:50]

Well, I mean, our official is the Society of California CPAs, but we rebranded last year, and so we are a member's club, and we are cool and modern and innovative, so, hence calculations. And it fits on all of our logos, all of our swag, and it looks kind of cool. So, that's why we kind of go with that.

Gene Marks [00:01:50 - 00:02:20]

I love it, and I think that makes a lot of sense. And again, in Pennsylvania, it's like the PICPA, which you can't really say that CalCPA just kind of flows. It's a cool, you know, it's a cool look and feel. So, I like it. And actually, it's funny, you know, we talk, we will talk a little bit about, you know, some of the challenges the profession has. And some of the challenges the profession has is straight branding. You know, just, it's like an older look and feel, you know? And was that some of the thought that went into it when you guys rebranded your, your society?

Denise Froemming [00:02:21 - 00:02:49]

100%, yes. It's one of our, you know, outcomes. We have four pillars. We have a shift in the identity, and I think we're all there, but we have to shift, you know, the possibilities, what the profession looks like. When you say accountant, people are, "I'm out." So, we don't want to have that. We want people to lean in. And so that that really was behind a lot of the, the branding and new messaging that we have. We're not number crunchers, we are sense makers. So, it's kind of some of that.

Gene Marks [00:02:50 - 00:03:14]

I think it makes sense. I think it's a great move. It wouldn't surprise me to see that happening at other chapters or societies around the country. I just, I think, you know, again, I'm a CPA, so I feel comfortable, I think, you know, the whole profession needs a little bit of an updating in certain places. I'm a proud member of this profession and I think that that kind of a move to call your state society, that makes a lot of sense to me. So, good for you. I think that's great.

Denise Froemming [00:03:14 - 00:03:25]

We've been talking, a number of us, with Jen of the, you know, Pennsylvania. So, I do talk to her, the CEO, and we've been talking and we all agree there needs to be some refresh.

Gene Marks [00:03:25 - 00:03:34]

Yeah, I agree. Next time you talk to her, suggest like Gene's CPAs. I kind of like that. It's got a good ring to it. Do you know what I mean?

Denise Froemming [00:03:34 - 00:03:35]

Talking to her this week? Yes.

Gene Marks [00:03:35 - 00:03:53]

Good. I'm sure that'll go over real well. I did speak with her a few weeks ago and she's, she's awesome, as well. Jen, she's really cool. Tell me a little bit about yourself. So how did you, how long have you been at this position? And, you know, what's your background?

Denise Froemming [00:03:53 - 00:04:44]

So, my back, I'm a CPA also and my background is largely, I worked in healthcare for many years. I started out in finance and accounting, director of counting in tax and association for pathologists, and so moved in healthcare for 20 some years. Then I was in real estate as a CEO of a national, these were all international organizations, international organization that dealt with more real estate managers; Dubai, we traveled everywhere. So, we had real estate managers everywhere.

And then someone had reached out to me and said, you know, your son's in California, you are a CPA. Would you be interested in this position? And I thought, of course, because I can help my profession and to me that was something that was really important and I love it. I've been here two and a half years and couldn't think of anywhere else I'd rather be.

Gene Marks [00:04:44 - 00:05:34]

You know, don't you think that what you've done, it so personifies what more CPAs should be doing? I mean, yeah, you were a director of accounting, you came up through the accounting role, but you're now running a giant organization. I mean, you know, as CEO, as a CPA. I mean, some people that, you know, some accountants themselves, we pigeonhole ourselves into just, we're tax or we're audit or we're finance. When you know our background, your background has allowed you to take on a leadership role in an organization, and you didn't necessarily have to be doing this for CalCPA. I mean, you … now that you're doing this, you could be CEO or executive director of any larger nonprofit. It's about leadership and management, but you need the basis of financials to do that. Do you know what I mean?

Denise Froemming [00:05:35 - 00:06:10]

You do. You do. And I actually did the opposite. So, I was with international organizations in the beginning, and then I kind of moved into the state. But to your point, Gene, and this is what we try to communicate, is there's so many possibilities, and the CPA is the entry point, right? The jumping-off point. It allows you to have that just financial acumen, and then also some of the ethics piece and the integrity, which I think is so important. But the foundation, and you can go anywhere with it, right? And that's, I think, what's so important to communicate to young professionals and to students honestly.

Gene Marks [00:06:11 - 00:06:45]

Okay, so how are you communicating this? What are you doing, because you're absolutely right? I don't think enough students recognize that. And I think we as a profession, need to continue to do a better job creating awareness that being a CPA, I mean, it's all business, it's about math. That's where it starts. And so it is such a solid foundation to start as a CPA. How do you communicate that in California? I mean, you've got a recruiting issue like every other state. So, what are you doing to get that message across, and what are you planning to do?

Denise Froemming [00:06:45 - 00:07:43]

Yeah, I think there's a couple different, kind of like the three legs of the stool, right? But we want to partner, so partnering is really important to us with associations, stakeholders, to amplify the message. So, that's very important. We want to work with all of our members to tell a story, a compelling story. So, I think that's, I mean, it starts with every one of us, right? Not to tell the story of we walked up a hill 10 miles in the snow, right, but all the opportunities we have when we put in the effort, right, that needed to be put in in the beginning, but all the opportunities we have.

And then we're doing a lot with, we're doing some with high school students. I just did a presentation this week for fourth graders from a financial literacy perspective. We have a community college to CPA program. We have firm crawls. You might ask, what is a firm crawl? So, kind of like a pub crawl, but with no alcohol, and you go to firms, not bars. So, take communication.

Gene Marks [00:07:43 - 00:07:45]

That doesn't sound very fun.

Denise Froemming [00:07:45 - 00:08:16]

Yes, Gene. So, you go to different firms, maybe three to four. You see what different firms are like because we know there's a fit for everyone somewhere, and then you just have an opportunity to give your resume. So, there's maybe not as fun as a pub crawl, but next to that, this is something that is interesting. So, we're really trying to make the profession just more attractive and also to make those connections and mentoring. It's really important.

Gene Marks [00:08:17 - 00:09:03]

Yeah. You know, the profession's changed a lot since you and I started in it, because generations have changed, and I don't believe that. I mean, I have kids in their 20s. They're hard workers, are good kids, and I know they're friends, and their friends are hard workers and good kids. So, this is not like, oh, the younger generation doesn't work as hard as that. I don't buy into that.

But there's different priorities, you know, and I'm wondering if what's been considered to recruit these younger people out of college? I mean, Gen Zers just have a different mindset and priorities than when you and I were graduating college. What's being done to match the profession's needs with the priorities of those younger people?

Denise Froemming [00:09:03 - 00:10:13]

Yeah, that's a great question, and actually, we just did a webinar/podcast on ... so Marcie Merriman, I think it is, she did a really, from EY, a really in-depth report on Gen Z and what she talks about is this generation is focused on money, saving, right, and also on stability, on having a career that has is stable, right?

So, I think for me, the accounting profession, CPA, offers that credibility, stability allows you to have a job when the economy is not really doing as well as it could be. So, I think there's a match there and more of a match than there's been and definitely looking at more diversity in the profession because we know that first generation college students gravitate towards that credibility, stability. So, that's where we're trying to make that match.

So, I think there's, I really believe there's opportunity as we make sure that we're communicating that message to the generation that is receiving some of that.

Gene Marks [00:10:14 - 00:11:14]

Yeah, I agree. It's funny you talk about stability, as well. Like, I was reading how, like, the Millennials right now are going through, I don't know how old your son is, but you know, what they have gone through in the past 20 years between pandemics and wars and financial blowouts on Wall Street, you think, like, you don't appreciate as you're going through, and then you're like, wow. I mean, that generation has really seen some stuff.

And I think you're right, you know, that younger part of that generation, and of course, the generation behind them, the Gen Zers, they must look at that and be like, wow, it is definitely a very volatile world out there. And I do desire stability, and this is a profession that will provide that. Don't you think that the profession itself provides a lot more than just finance, though? Like, do you just, you know that you just have to be an accountant all of your life?

Denise Froemming [00:11:04 - 00:12:05]

No, I, to me, one of, while an AI is changing this, right, too. So, at the heart to me of the profession is the relationships, it's communicating. And I know some students will say, do you have to be good in math? And I'm like, we really got to be good communicating and analyzing and having relationships with individuals because you have clients, right? You have others that you're working with, and so to me, there's really the opportunity to do so much more than just the analytical piece, right?

And so, I think we have to lean into that, and that has to be part of the messaging. And I do think AI will help to eliminate some of that, the work and the routine work that was part of the profession and allow individuals to step more into that communication and much more of the higher analytical strategy piece.

Gene Marks [00:12:06 - 00:12:35]

Do you think it's a bad thing with AI? You know and I know within the next few years, the typical CPA and their clients can just as well ask ChatGPT or Gemini or Anthropic a tax question or a research question. And as these large language models get smarter and smarter and better trained, they're going to provide better and more accurate answers to the point where, what do you really need an accountant for to answer those questions? Should accountants be concerned about that?

Denise Froemming [00:12:36 - 00:13:34]

I would say, I say, no, I'm a glass half full. I don't know if you ever listen to the podcast, “Make Me Smart”, but they always have in there. Are you a glass half full or empty on this? And I would say, am I glad glass half full. You can get certain questions transactional answered, but you can't get the dots and the pieces put together as to, oh, I can do this. But like my son said to me, he has pretty easy return. He's like, I need your CPA that you use because I don't know how to look at all those pieces and make my decisions.

And I had this, one of our members is not a CPA. He's a wealth advisor, and he said, I need to work with your CPAs because I can't get 137% return, but they can through the tax strategies that they use, right? So, working together and understanding the pieces, that's where the CPAs come into place in my mind. So, there's a piece for everything, right?

Gene Marks [00:13:35 - 00:14:52]

Couldn't agree with you more. You know, and I think the people that resist the technology, the ones that are just gonna lose out, and let's face it, I mean, there's so much in this world, you know, Denise, that we do with our days that are busy work, that if it could be automated or done by technology, why are we so afraid of that? I don't know how a car works, but I drive my car every day. Do I really need to know how it works? I haven't maintained, and I have a mechanic, and therefore, I don't have to think about.

Meanwhile, if you drove a car in the 1920s or early 20th century, you had to know how a car worked because they broke down a lot and you had to fix it. And that's just not something we have to worry about today, and I just think CPAs, I don't think they need to know a lot of the technical things. They need to understand why, not necessarily how, and I'm hoping that CPAs will be smart enough to recognize that and take advantage.

Let me pivot a little bit. Let's talk about California. Tell us a little bit about calculator. How many members do you guys have? How are you organized? You're the big, you guys are like, California is like, I think, the fourth-biggest economy in the world. How do you run an organization of CPAs that's that big? Tell us a little bit about it.

Denise Froemming [00:14:52 - 00:15:38]

There's a lot of distance. That's the one thing, right? You have to deal with that, and so we have over 40,000 CPAs, and, you know, we say from Main Street to Wall street, so of all sizes, all disciplines, sectors, so forth. And we have 14 chapters, I'd say local presence, right? That's kind of how you get that connection, because to your point, it's so large. So, how do you bring everyone together so they feel like there's a home?

And with the chapters, each chapter has, you can connect in different ways. So, some of them have virtual events. LA has a summer leadership camp. And the good thing about the virtuals is you can join no matter where you are in the state, right? So, you just join in firms, connect with students, and there's a whole program for a day.

[00:15:39 - 00:16:59]

There's also ways to connect in the community. If you want to hike, if you want to put bikes together for kids, there's all sorts of different social and community events to connect in, and that is really attractive to young professionals. If you want to play volleyball, there's that. There's also ways to connect in with firm Olympics and so forth. And then there's ways for business development. We have an ABC Night, we call it, it's attorneys, bankers and CPAs, but that's a business development, kind of net weaving, I like to say. Opportunity to connect in.

Like I said, we have wealth managers, we have those in real estate. Some of my members from before are members in CalCPA. So, it's just, it's quite interesting because they're working in 1031 exchanges and they always tell me CPA is at the heart of that. So, I need to know how I connect in, too. So, there's a way to connect more in a local environment so that you can find your people, right, and not have to just be at the state. So, it's hard because in LA, to drive, right, 10 miles could take you an hour. So, we have to find ways to kind of make those meetups that are a little more easy and not as difficult.

Gene Marks [00:17:00 - 00:17:35]

Do you find that the issues that the organization has to face are very different when, I mean, you're predominantly, your CPAs are in San Francisco and Los Angeles and San Diego, the three biggest cities, but you must have a large population that are outside of the cities that are rural, and they have different needs, don't they? I mean, what are they? I'm kind of curious. And how do you address them? Like, how do you separate your constituency that's in the big cities versus the ones that are in rural parts of the state that have different wants?

Denise Froemming [00:17:36 - 00:18:25]

I mean, that's where the, like to say, the Starbucks model comes into play, right? You have a framework that you use, but you have to tweak it, like you said, based on the area. Inland Empire, for example, that is a really strong chapter. Not as large as the others, but they have a, their student event is like 200 and some people, it's huge. So, we let them lean into those events, those activities that make sense for them, right? LA does this leadership summer camp, and if it makes sense for another area, then they can leverage that template, but they need to lean into, too. What makes sense to your point, for them and what makes them successful because they're all different but yet similar, right? So, it's having that flexibility.

Gene Marks [00:18:27 - 00:19:00]

Denise, as we're talking today, we've just come out of busy season. So now your members are now taking a breather and getting back to normalcy. What, what issues, what headaches do you have on your list today, like as the CEO of this big organization? What are some of the things that you're dealing with, like this week, out of curiosity, that you're, that you kind of, like give an example of the kinds of challenges that your members are having?

Denise Froemming [00:19:01 - 00:19:03]

Well, that's a long list, Gene.

Gene Marks [00:19:03 - 00:19:04]

It is a long list.

Denise Froemming [00:19:04 - 00:20:09]

It's a long list. You know, top of mind always, I think, about is relevancy. It's relevancy for CalCPA, for all state societies and we talk about that quite a bit. How do we make sure that we are relevant to our members and to the profession today? It's a lot different than it used to be. I mean, there's alliances out there competing. There's CPE competing. We do quite a bit on the advocacy front and from a community, but I think relevancy is always, I'm always thinking about that.

I'm always thinking about workforce and pipeline and thinking about really, what are those products or services that are going to really make a difference to our, to our members and customers? And with all the noise they have, there's a lot of noise out there, how do we cut through that noise and not send, you know, 10 emails a week? So, how do we make sure we connect in and personalize what they need?

Gene Marks [00:20:10 - 00:21:11]

And what do you think? What do you think is really relevant to your members? I mean, I can tell you why you think about that. I mean, as a CPA myself, first of all, I think without overthinking it, most people that run businesses tend to belong to their industry association because they know that that's the place that they, it's almost, you're paying dues into your industry, they're looking out for your best interests. They provide events, they provide networking, they provide a community. I just, everyone I know belongs to an association.

So, as a CPA, if I was in California, I belong with the CalCPA just because I just think that's, you know, that's what you do when you're running a business. You know, and maybe that type of thinking is outdated, but it's something that I think most of us think is important. But you're worried every day about providing that value to me, right? When I get my bill, how do I justify the fee that I have to pay? So, I'm just kind of curious, so what are your, how long have you been doing this? How long have you been with CalCPA now?

Denise Froemming [00:21:11 - 00:21:12]

Two and a half years.

Gene Marks [00:21:12 - 00:21:30]

Two and a half years. So, you've had some time, like, the honeymoon is over. You've had some time to get up to speed and really get to know your members and all of that. So, I'm just kind of curious, like, what's top of mind to say, like, you know, this is what we as an organization should be doing or will be doing to make sure we're really, we're really justifying the value for our members.

Denise Froemming [00:21:31 - 00:22:42]

Yeah, it's, I mean, I try to get out and talk to as many members as I can. So, anytime I say, if you want to talk to me, I'll talk to you anytime, anyplace. So, because that's, it's important to hear from them, and what I'm hearing is, you know, how do we, business model. So, how do we look at moving from that transactional to more of that strategic advisor, right? So, that's a piece we need to help with. How do we make sure that they have more bandwidth, so help on the technology side and the automation side. And how can the smaller firms compete with the large, be like a large firm? Because they don't have the opportunity to have all the tools. So, business intelligence, how can we provide some of those tools to them to help them compete, right? It's all in making them more successful and, you know, the advocacy side. How do they know what's happening?

We're kind of out as the puck is, you know, in a hockey game. We're out there seeing what's happening so that we can help them prepare. Those are what I'm hearing as the top, and then talent. Talent is, is, is critical to them, as well.

Gene Marks [00:22:42 - 00:24:10]

And it's, you know, it's one of the biggest advantages that you have is that you're in the middle of it all. I mean, you were the ultimate networker. You're connected to all these firms and all these people in the profession, as well as people outside of the profession, people in government, you know. So, you've got the ability to help your members find people and retain people. You've got the ability to provide them with better technology resources and education and training, better opportunities. You've got the ability to, smaller firms can't compete with larger firms, but they can partner with them. And I truly believe that larger firms, they can't do it all. And they have the same resource issues that everybody has, so they would love to outsource certain bits of work to a smaller firm if they're able to make a little money on it, and the smaller firm is willing to do that work, and you're in the center of all of that.

It seems like that's the kind of stuff that you're working on to really bring that value to your members. Is there any, you know, is there any – you talk about talent within the organization – do you think there's any, like, like certain types of talent that an organization of yours really needs to have? There are other people that will watch and listen to this that are running their own nonprofits as well as running, you know, your colleagues that are running CPA societies. You know, is there, have you seen any type of talent that's evolved into something that's really become more important over the years, that's value to your members?

Denise Froemming [00:24:10 - 00:25:16]

I mean, definitely, and one of our values, because we just did our values, is curiosity. I think that is key, and the ability to innovate and not just have the top-level people, even the mid, mid-tier, it's. Everyone has to have that ability to see what they're doing, how it makes sense, how it plugs in to everything and to innovate. So, I think that has to be everywhere in the organization, which before it wasn't right, but it's, it's truly important.

And I would say the technology. So, the digital transformation, leaning into AI, using the tools to help differentiate yourself. And I just ... I heard this interesting statistic yesterday. I'm a podcast junkie, maybe you are too, Gene? But I was listening to McKinsey, I think that's what it was, and they said businesses that really innovate, innovate, 80% of their innovation is off their core. That's interesting because a lot of times you think you have to build the next new iPhone or something. It's just doing something different and meeting a pain point, right?

Gene Marks [00:25:16]

Yep.

Denise Froemming [00:25:16 - 00:25:25]

So, that's interesting to me and it's, so it's looking inside and seeing how you can kind of reimagine.

Gene Marks [00:25:25 - 00:26:15]

It's fascinating that you say. I mean, I was just meeting with a young woman this morning who wants to start up a business, and, and we were talking about how, like, you know, in 2024, it's kind of tough to come up with a new AirBnB or Uber. I mean, they happen, but for the most part, 99% of businesses that start up, you take an existing idea and you make it better. And the really great organizations take their core, what they're doing, and then they make it better.

And it's the same thing with employees. I mean, you hear if corporate employees are concerned about, you know, being laid off, for example, the way that you avoid being laid off is being innovative, right? I mean, coming to you and say, we can be doing this and let me run with it, or here's a great idea to help our members. You would, like, love that. That's like, what you're looking for. And I'm glad that you have that mindset that you wouldn't shut the door on anybody that comes to you with good ideas to help them implement.

Denise Froemming [00:26:15 - 00:26:45]

No, I mean, all ideas, right? You just, you put them in the funnel and you see if there's any opportunity. We just implemented a … we do project briefs. We use Monday.com to do all of our viewing of our projects and where we're at, and it's transparent to everyone that way. To your point, if someone has an idea, they see something, they may have an idea, they can come to the table, and it just helps to have the transparency and visibility.

Gene Marks [00:26:46 - 00:27:17]

That's great. All right, final question for you. This has been great, I've learned a lot from you, and I'm curious. You've now been with the organization for over two years. Obviously, you've been in the profession for a number of years. Is there any firms that you bump into, any of your members - don't name names, it's fine - but, like, people that are doing, like, cool stuff or are really positioning themselves, like, you look at this firm, you're like, these guys are going to be, they're going to be successful because they're doing, they're doing this right. You know, does any examples come to mind that you can share?

Denise Froemming [00:27:17 - 00:27:59]

There's many. I will tell you, the more I talk to the firms out there, so innovative from the talent development, you know, being balanced with their workloads, even working, you know, part time if someone wants to work part time. So, they're, they're very innovative there from a culture standpoint. They're creating cultures that people want to come to work, right? And they want to be engaged, and they are innovative, Doing different, different business lines, kind of connecting the purpose of what people are doing from work and what they're doing that meaningful work. There's so many examples. I'm encouraged every day when I talk to our members and our firms.

Gene Marks [00:28:00 - 00:28:36]

Yeah, it sounds like they're really focusing on their people really well and really trying to be innovative with their workplace and understanding the need for balance in their lives. It's so important. Well, Denise, great speaking with you. I want to wish you best of luck in California with CalCPA. I love the new branding and good luck running an organization of that size. I can only imagine the disparaging view, not disparaging, but the disparate views that you must have among the state on many different issues. But thanks for doing you're doing great work, so thank you so much.

Denise Froemming [00:28:36 - 00:28:43]

Thank you. Thanks for the opportunity. I love what I do so anybody can reach out anytime. Thanks, Gene.

Gene Marks [00:28:44 - 00:29:23]

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