You need courage to led a business

July 29th, 2020

I read a lot of books and the ones I enjoy most are usually biographical. This one by Bob Iger, CEO of Disney, is amongst the best I have read on leadership not because, during his 14 years as CEO, $184 billion was added to shareholder value but because of the way he led the business – his philosophy of leadership.The book is full of sage advice (in fact he added 45 “lessons to lead by” at the end of the book.

For those of my friends and associates who are contemplating the challenges facing the accounting profession he notes “The decision to disrupt businesses that are fundamentally working but whose future is in question–intentionally taking on short-term losses in the hope of generating long-term growth–requires no small amount of courage.”

He continues … “When you innovate, everything needs to change, not just the way you make or deliver a product. Many of the practices and structures within the company need to adapt too …”

Those of you who are planning to jump on the “advisory” bandwagon and think that it’s just a matter of doing a bit of cross-selling with the aid of some technology that will enable you to have a “strategic meeting” with your clients are in for a very big shock.

Successfully monetizing business advisory services is categorically not a simple line extension. It calls for a fundamental change in your business model which, in addition to courage, requires three “sets” – mind set, skill set, and resource set.

A dozen questions to ask before starting a business

May 25th, 2018
  1. Who will be your customers?
  2. Why will they want your product/service?
  3. How many of them exist and how will you get to them?
  4. How much will they be willing to pay?
  5. Why will your customers talk positively about your product/service?
  6. What will your product/service cost to create, deliver and support?
  7. How easy will it be to start this business?
  8. How much capital will you need to start?
  9. How will you defend it against competitors?
  10. How easy will it be to scale the business?
  11. How much capital will you need to scale it?
  12. Why do you want to do this?

If you don’t know the answers, or at the very least have a good feel for them then save your time and money and don’t start.

IKEA’s success may have more to do with accident than design

April 5th, 2018

As much as I love talking about strategy and execution and all that cool stuff I have always felt that a “magic potion” simply does not exist and great strategy is usually only recognized in hindsight and has way more to do with how people in a leadership role respond to opportunities that pop up from time to time and challenges that pop up all the time. Read more…

Should Governments step in to assist businesses in trouble?

March 25th, 2018

And is this something business advisors should think about? Read more…

It was 1998 and I was thinking about the firm of the future

February 1st, 2018

In 1998 I was the CEO of Results Accountants’ Systems – the Accountants’ Bootcamp company. During a particularly difficult time I wrote a weekly report to our 100+ team scattered around the world. The report I wrote on August 15 talked to a “dream” I had about the way firms would be operating in the future. I picked 2008 as the year that defined the future but was out by 10 years. Read more…

Ever thought of playing a game with your clients?

January 1st, 2018

One of the more interesting and enjoyable experiences I’ve had in the past year is spending some quality time with Paul Kennedy and his team in his Goffs Oak office in the UK. I’m about spend another 5 months there to finish a project that I think all accountants (and other business advisors) should seriously consider. Read more…

What I’m working on: The intersection between neuroscience and practice development

December 25th, 2017

Yesterday, a good friend of mine asked if I was enjoying “retirement.” I explained that I haven’t retired (and never will) but have simply changed careers from running a consulting business to writing about the SME consulting process through the lens of my own experience, my observation of the experience of others, and based on some important science Read more…

The Creation of a Phenomenally Profitable Firm is a Matter of Choice

August 5th, 2017

I have been looking through some of my earlier writing and came across a report I wrote in 2013 on an analysis is did on the 2012 Good Bad and Ugly survey conducted on Australian firms by Business Fitness.

I was looking for the defining characteristics of firms where the owner(s) were achieving a net profit of $1 million or more and it reminded me that there’s no secret here, the success of a firm (and this applies to any business) is really a matter of choice about where your focus needs to be and how you perform your role as the leader of the firm.

I thought I’d share the concluding comments in the report that you can download by clicking here if you’d like to read the whole document.

This review confirms a view I’ve held for a long time and that is the key to building a very successful practice is exactly the same as building any other type of business.  It is to have a clear vision for where you want your firm to get to and then organize and execute relentlessly around that vision. To build a professional service firm with a high level of leverage requires exceptional management and leadership skills because professional knowledge workers are so fickle and can leave at any time. There will always be some firms that achieve the top 5 results that we see here but I do not believe it’s a sustainable model.

The one thing that leads to exceptional firm performance is creating value for customers. Whether that creates wealth for the firm in turn depends on two things: how much value is created for each customer and how many customers you can attract. The firms that have achieved high levels of leverage don’t necessarily have the most clients but those with less clients do have higher average fees per clients and vice versa.

As Peter Drucker said many years ago:

“Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

To build a great firm you can take many paths but the important thing is to decide which path suits you. Don’t jump from one path to the next simply because you see a nice shiny new toy on it. Most firms try to be all things to all people and when you combine that with the two brick walls you end up with a small firm going nowhere.

There are, however, firms that truly understand Drucker’s advice and focus on ways they can innovate with service design and delivery and do so in a way that gives them a strong marketing message to attract the type of customers they want (recall the example of OBK I spoke of) in numbers that produce serious returns AND attract and retain team members with the requisite attitude and aptitude to deliver the promised value.

What this is about is not looking to implement the latest technologies, best practices and managements fads. It’s about creating a business model that meets a real need and then executing with precision. To do that requires leadership at a high level. The essence of leadership is the process of creating and articulating a desirable vision that your team embraces and then investing in the development of those people to make it happen. But since you can’t give what you don’t have it all starts with developing yourself which is why I feel strongly that personal development comes before practice development. 

Accountants in public practice can do what the practice does and therein lies the heart of the problem. Jim Collins calls this the curse of competence. Michael Gerber calls it working IN your business rather than ON it. If you want to create a very profitable firm you can—the fact that we see the evidence for this is in this data set. But you will never do that unless you assume the role of leader and the quicker you make that a full time role the quicker you’ll see the results that are possible.

What Frogs and Gross Margins have in common

June 2nd, 2017

You’ve probably heard that if you drop a frog into a pot of cold water and slowly bring it to the boil the frog will, in the first instance, adapt to the rising temperature but will ultimately succumb to the heat and die. On the other hand, if you throw a frog into a pot of boiling water it will immediately jump out and proceed on its merry way. Read more…

Do accountants really understand what offering a business advisory service means?

May 1st, 2017

Several years ago, as part of a Principa marketing initiative, I conducted a telephone survey of 58 accounting firms in northern Nevada and California who had described themselves in the phone directory and/or their web site as being accountants (CPAs) and business advisers. Read more…