Dow Schofield Watts broadens services to provide fractional support to senior leaders

UK-based Dow Schofield Watts (DSW), a mid-market professional services network, announced the creation of a new division called DSW Principal Partners (DSWPP) on February 15. The new venture aims to provide clients access to an on-demand team of C-suite executives and subject matter experts.

DSW, who ranked 56th in Accountancy Age’s 50+50 Rankings this year, said the move comes in response to growing demand, especially among small and medium-sized companies, for temporary or project-based executive talent. Rather than hiring full-time, the fractional model allows businesses to tap niche skillsets without taking on permanent salary and benefits costs.

“We empower companies by providing seasoned professionals who have real-world expertise in transforming industries and driving growth,” said Steve Lord, a former private equity investor and industrial executive who will lead DSWPP as a founding member.

Lord will work alongside a team of other seasoned experts spanning functions like finance, operations, marketing, and more. He said DSWPP stands out for its focus on execution, not just advisory services. “Our Principals roll up their sleeves to get things done,” he stated.

The launch comes alongside DSW’s wider expansion efforts, according to James Dow, CEO of parent company DSW Capital. “We have a strategy to keep broadening our niche offerings that align to client needs,” Dow said. “Having caliber professionals like Steve and team join DSW speaks volumes.”

DSWPP has national aspirations in the UK and eventual global presence. The firm already serves private equity portfolio companies and other clients needing turnaround or specialized support. It aims to keep recruiting senior-level Principals across emerging areas like artificial intelligence, healthcare, education, and sustainability.

Is it time for more firms to boost their strategic capabilities?

In a bid to expand beyond traditional compliance services and evolve into higher-value advisory partners, more and more accounting firms have begun launching specialty divisions that provide clients access to on-demand executive talent.

1. Value-Add for Clients: By offering on-demand executive talent, accounting firms can provide a lot more value beyond just compliance services. This helps them evolve into a more holistic strategic advisor for client businesses.
2. Revenue Diversification: Advisory and consulting services tend to be higher margin than compliance work. Launching an executive services arm allows accounting firms to diversify their revenue mix for more profitability.
3. Keeping Pace with Change: The accounting sector is being disrupted by technology and client needs are shifting. Offering fractional executive services shows the firm is adapting to change and staying competitive.
4. Talent Attraction: Having these kind of innovative offerings aids with attraction and retention of top non-traditional talent from outside the accounting industry to evolve the firm’s capabilities.
5. Brand Differentiation: As accounting services get increasingly commoditized, running an executive talent platform can really distinguish an accounting brand in the market and make it stand out from the rest.

Accounting has to modernise with the market

While fractional executive services promise tremendous upside, some accounting firms may be hesitant to take the plunge due to perceived risk or organizational inertia. Firms should thoughtfully address common challenges to ensure a smooth rollout.

Expertise gaps

Having an executive services arm requires different core competencies around talent management versus pure accounting skills. Firms will need to invest in hiring and training specialized recruiters and program managers. Building an internal team with both domain expertise and the professional network to source top-tier executive Principals is critical.

Partnership dynamics

Gaining internal consensus and alignment around a new business line can be difficult, especially when compensation and economics have to be worked out. There may be scepticism until profitability is proven. Firms should thoroughly model the economics and clearly communicate incentives to foster partner support before launch.

Client education

Clients may wrongly assume fractional executives are temp workers or that an on-demand model translates to lower quality. Firms must proactively demonstrate how this model actually enhances value thanks to the seasoned expertise on offer. Case studies and client testimonials can help silence skeptics.

Despite requiring upfront effort, the market opportunity makes building an executive services capability well worth the effort for ambitious accounting players according to experts. With the right talent, positioning and internal cheerleading, it can take off.