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CEO's Message—Second Quarter 2016
25 Years of History in the Making
Excerpts from an Interview with the CEO
Parnell Black, MBA, CPA, CVA
Chief Executive Officer
P = Parnell
I = Interviewer
This interview is with Parnell Black, who is the current CEO of NACVA, and has been since its inception 25 years ago when he and Robert (Bob) L. Green founded the National Association of Certified Valuators and Analysts.
I—Mr. Black, I’ve often wondered what it was like on day one? I mean, did you and Bob just say “we’re going to start an association?”
P—There really wasn’t a day one. What started first was a two-day seminar entitled Business Valuation: Fundamentals, Techniques & Theory. When Bob and I partnered our CPA firms in 1989, it was with the express understanding that we were going to build a business that moved us away from tax and accounting services, was not dependent on the local economy, with revenues not limited by the number of hours in a day.
I—How did that lead to Business Valuation?
P—In a day-long meeting, of which I probably still have the notes, Bob and I explored a variety of different possibilities, not just for the type of training, but who we wanted to teach our training to. And because we were CPAs and knew most state licensing boards required 40 hours a year continuing professional education, it made great sense to stick with what we knew. The challenge was what topic?
I had gotten a hold of a public information AICPA survey taken of 2700 CPAs in 1989 that identified within it fields of interest. To this day, I still recall the field of highest interest was business valuation from 54% of the respondents.
I—So, what happened next?
P—Initially, nothing. This was all new territory for Bob and I, so we kind-of froze. After six months, I decided something had to be done, so I developed a marketing flyer describing a two-day course. I identified three locations and dates the seminar would be offered, I lined up hotels, and then printed 15,000 four-page flyers. Many of the 15,000 names, mainly CPAs and business brokers, were obtained from the yellow pages of phone books found at the public library.
With a flyer in hand and mailing scheduled in two days, I walked into Bob’s office, dropped it on his desk, and said, “you have three months to create this course.” He feigned surprise, but went immediately to work. You see, we had an agreement, I would handle all the business and marketing, and he’d develop and teach the training.
I—Where did NACVA come into the picture?
P—Well, we executed all three seminars, the third of which was in New York. Most of the attendees there were CPAs, and two approached Bob stating, “you two guys need to start an association because we need more than just this one seminar, we need a place to go for answers to our questions, identify other helpful resources, we’ll need more training, and even a certification to help us market our services.”
This was in early 1991, and of course the idea immediately took hold, so Bob and I incorporated NACVA in May, 1991.
I’d like to say, the rest is history, but it really didn’t, and doesn’t, work that way.
I—What do you mean by that?
P—Starting an association is not just an incredibly large undertaking, it’s an enormous responsibility. As you grow, and take more and more people under your wings, you realize that failure is not an option, because your members and the certification upon which the association has bestowed them, now have careers that are in large part reliant on the Association and the prestige it carries with it.
I woke up in the middle of the night, about one year after inception, sweating, realizing what I had gotten myself into. I had inadvertently defined my career and my life. I was obligated to carry NACVA forward at all costs.
I—At the time, did you have any idea or vision of what NACVA could evolve into and that we might be where we are today?
P—I’m sure I did because I kept reflecting back on the AICPA survey—54% of 300,000 plus CPAs in America is a big number. Now, I didn’t think we’d ever see 160,000 CPAs join the Association, but I knew in my heart the opportunity and the need for support was in the thousands.
I—So, after your epiphany that one night, where did things go from there?
P—What I realized back then was building an association, at least from my perspective, was like building a skyscraper. This was a huge undertaking and we could not do it alone. Moreover, we needed to be fully committed. So what proceeded was a process of preparing to build a skyscraper, metaphorically speaking. Over the next few years we did three things:
1) Sold our CPA practice; 2) Found some investors; 3) and most significantly, formulated NACVA committees and boards to shoulder some of our burden and get advice on how to build an association that could serve their member’s needs.
I—What role do you believe NACVA has played in shaping the valuation and financial forensics profession?
P—I can confidently say NACVA is the reason business valuation is now a well-defined and recognized profession.
At the time of our inception, there did exist the Institute of Business Appraisers and the American Society of Appraisers, but beyond that and the few courses they had developed, little had been done to develop this profession. What I mean by that is, only a few books had been written, a half-dozen maybe; most of the industry’s training was limited in its scope and availability; there was one software program which was nothing like what exists today; I recall two newsletters that catered to the industry; and credentialed valuators numbered in the hundreds. Now it is in the thousands.
What I also know is that a few years after our inception, business valuation services appeared for the first time on Accounting Today magazine’s list of the top 20 consulting services being offered by the Top 100 firms. A year later, it rose to the number three spot and the year after that, it ranked the number one consulting service and it stayed at number one for about 15 years. Now it bounces around number one along with financial litigation services; another field in which we ignited the fire.
I—How would you sum up the following 20 years bringing us to the current day?
P—I have hundreds of stories I could tell taking us through each year and each step of our evolution. But what you’ll find is, every story centers around members of NACVA, not me or even much around headquarters.
As I mentioned previously, early in our evolution we saw it necessary to reach out to our members through team, committee, and board involvement to help shoulder the burden building this Association. Members were also our source of ideas for new courses, products, services, and ways we could improve. Frankly, if there is a definition of a “member-driven and member-run association,” we are it.
NACVA owes a debt of gratitude to literally hundreds of members. It’s really been amazing. I wish I could acknowledge each one of them here, but the list is just too long. Moreover, I wouldn’t know where to begin.
I—Let’s talk about going forward. What do you see in NACVA’s future?
P—Most definitely, business valuation and financial forensics are here to stay. They are staple services now for CPA and business advisory firms, and in my opinion, as much so as tax and accounting services. I also believe that the skill sets to which we teach and certify folks are foundations to a well-rounded business advisor, and frankly, should be a part of any entry exam.
With NACVA being the dominant force in this industry, we are here to stay and will continue to lead the way for many years to come.
I—And what does that look like?
P—You will see us continue to improve in every way we can, on all fronts. This will be aided by use of, and improvements in technology, making delivery of training, data, and an entire member support infrastructure more streamlined and easily accessible. Essentially, we will be the industry’s resource central, much like we have been, but even more robust, convenient, and economical.
I should point out that 70% of the training and knowledge put forth in our industry comes out of NACVA.
I—Any new pursuits, new products on the horizon?
P—For my entire career I’ve been keen on the idea that the skill sets acquired by a business valuation professional makes him or her uniquely qualified to advise business owners on how to improve company value. Taking them down a path of constant improvement that may lead to the ultimate sale of the business.
In a recent survey of about 400 members, when asked, “do valuation services lead to engagements for other types of services, besides litigation support,” 46% said yes, and half of them said they provide strategic business and succession planning. So, 23%. This is encouraging, but I don’t know the depth of those advisory services. What I do know, is there are a lot of missed opportunities for our members and I intend on putting a lot of energy into growing this opportunity.
I—Do you have any final words?
P—Yes, to our members, if you truly desire in your heart to excel in this chosen profession, make knowledge a daily pursuit, cultivate a network, get and stay involved with NACVA, always strive for improvement, and you will have an enlightened and highly rewarding career—I guarantee it.