Author: Ric Payne

Don’t chase money, chase what makes you money

For the last 40 years I have been passionately interested in the factors that are associated with practice profitability. I’ve seen some fabulously profitable practices (e.g. where owners are making in excess of $1 million each per year) and some extraordinarily unprofitable ones where, even after many years in the business, the owners are putting in just as much effort as their colleagues in highly profitable firms but they are making only a fraction of the income. Continue reading “Don’t chase money, chase what makes you money”

Sometimes it’s the simple solutions that stare us in the face

I’m not sure whether this is myth or real but it’s interesting nontheless. When the US first got into space exploration and they launched people into space they discovered that ball point pens did not work in zero gravity so NASA approved a research project to find a solution.  The research was to take a decade and cost $120 million.  The outcome was a pen that could write in any conditions, on any surface, upside down, under water and in temperatures ranging from below freezing to 300 degrees C. Amazing innovation to say the least. Not long after the release of this incredible product NASA learned the Russians used a pencil.

A reminder of why you MUST focus on PROCESS not PRODUCTS

I received this email from one of our members after he attended Boot Camp.  It’s a sober reminder of how little ‘slip ups’ can have big consequences.

I am writing to tell you about the worst experience I have had since Boot Camp. I feel lots of emotional pain about it. What a “dope” I have been! I don’t plan on repeating it!  The salt in the wound was reading your Results Revisited manual.

Not long after attending Boot Camp I sold our first Planning Session to a client we have had for almost 20 years. Not only did we sell a Planning Session, involving all of their team members, but we also sold Towards Awesome Service and Phone Right all for about $10,000. The client is a wholesaler located in a small community with revenue of about $67 million.

We were feeling great! But the client was not ready to commit to additional service other than the monthly financial statements we were already producing for them. They wanted to wait and see what they would be able to do on their own after the Planning Session and the other two ‘products’. I outlined additional services, from monthly team meetings to identifying and monitoring KPIs as part of a Management Control Plan. But “no sale”.

Last week the client called and asked that I attend a meeting today involving the owners of the company, their executive management group and their consultants. Unknown to me, the “consultants” had analyzed the company and were presenting a review meeting to everyone, including the company’s banker.

At the meeting I found:

• The consultants had reviewed all the processes of the company
• The consultants had developed a management plan for the company.
• The consultants had developed performance standards for each of the key positions of the company.
• The consultants had developed KPIs (they call them Critical Performance Metrics or something like that).
• The consultants had developed draft budgets, cash flow projections, etc.
• Two people were there for three weeks and were paid $45,000.

I felt terrible that we didn’t get it because I know we could have done all of this work.

So what did we do wrong?

1. First, we sold products instead of a process. For example, we told them we could do a TAS team training program which we did and they loved it! BUT we did not position it as a marketing initiative linked back to a client advisory board and tied it to an ongoing KPI monitoring metrics such as referral rates, customer satisfaction, average transaction values, frequency of transactions. Our Phone Right training program was also a huge success but we did not integrate it into the company’s sales productivity monitoring system e.g. a KPI that monitored sales conversion rates.

2. We did not keep “taking the message to them”. We just continued as accountants without showing them the continuing process of business development. I gave up after the client didn’t show continuing interest.

3. I failed to see a buying signal the client gave us earlier this year when they asked us to “recharge” them again.

I recently picked up and read your Results Revisited Manual and it hit me between the eyeballs. Your ideas are right on target. Our initial work with clients after the Boot Camp was geared at selling them products (Towards Awesome Service, etc.) instead of looking at these as tools to supplement our work on the systems of the business.

Thanks for all you guys do for us. Boot Campers like me will eventually get the process “right”! Actually I hope this same experience has happened many times to other Boot Campers that way I won’t feel so stupid!

Two Questions Every CEO Should Ask

In 1981 after being appointed CEO of General Electric Jack Welch asked Peter Drucker to visit him at the company’s headquarters. They spent a day together during which time Drucker asked Welch just two questions.

The first was: “If you were not already in this business (referring to each of GE’s business units) would you enter it today?”  The second question was: “If the answer to the first question is no, what would you do about it? Continue reading “Two Questions Every CEO Should Ask”

Learners are Earners

I listened to an interview with Kevin Hall, the author of Aspire: Discovering Your Purpose Through the Power of Words, and a founding partner of Franklin Quest creators of the Franklin Day Planner.  As head of their Training and Sales group he noted that their top sales people earned more than $500,000 per year and their bottom people made less than $50,000.

He commissioned a study of the top 5% and the bottom 5% to determine what characteristics, if any, differentiated the two groups.  What the study revealed was a consistent difference between the two groups came down to two things: firstly, the top 5% exhibited much higher interpersonal astuteness i.e. they better understood, related to and empathized with people and secondly, the top 5% read at least 2 books per month!

Hall concluded that readers are leaders, leaders are readers, earners are learners, and learners are earners.  

The more you read the smarter you become.  The smarter you become the more valuable you become.  The more valuable you are the more opportunities you get.  The more opportunities you get the more you learn and the more you earn.  It’s as simple as that – earners are learners and learning projects you into a positive spiral of success.

Reading and writing are known to develop reasoning and thinking skills.  Reading is also the primary mechanism to develop your verbal communication skills which in turn increases your effectiveness in whatever you do.  The only way to expand your vocabulary and ability to structure ideas is to read.

I find it rather curious that knowledge is readily accessible at such a low cost and yet so many people claim they do not have time to read despite the fact that the vast majority of people who are in top leadership positions are avid readers.  Interestingly, they, like all of us, have 24 hours in each day some of which they choose to use for reading and reflection.

So with that in mid here’s a little challenge. How about you get up in the morning 1 hour earlier and you spend that hour reading something other than a professional technical journal.  That would give you nearly 30 hours per month of knowledge acquisition and 360 hours per year.  There is absolutely no doubt that your value to clients, the value to your team and the value to your family will dramatically increase … so too will your income and sense of accomplishment.

To get you started here are five books that I would put at the top of your reading list.  It would have been a lot easier to make a list of 50 books but I have chosen these because they are also books that you could recommend to any client who aspired to a better life through having a better business.  The entire library of five books has a total cost of less than $100 but mastering their content would yield a return of millions!

  1. Stephen Covey, The 7 Habits of Highly Effective People – this book needs to be studied not just read!  If you “read” it several years ago but you can’t recite the 7 habits, open it again and study it with a highlighter and a notebook by your side. It will change your life.
  2. Ken Blanchard & Sheldon Bowles, Raving Fans: A Revolutionary Approach To Customer Service – I put this in my list because, in a disarmingly simple and highly readable way, it explains the essence of business—it’s primary purpose if you will: to attract and retain customers. It’s a classic as are all of Blanchard’s books.
  3. Jack Canfield, The Success Principles – this title is on my list because I firmly believe that personal development comes before business development. Covey’s 7 Habits will give you a framework for success through greater effectiveness while Canfield’s book is packed full of anecdotal practical ideas that when applied to your daily life will change everything for you.  I would bracket Canfield’s book with Napoleon Hill’s Think and Grow Rich, the book that really started the personal development industry, but Canfield’s book gets my nod because of its contemporary context.  
  4. John Maxwell, The 21 Irrefutable Laws of leadership – I have added this to the list because I believe that sound leadership is a key to success in business and life and this book is the most “readable” and down to earth practical summary of 21 leadership principles that anyone can master.  There is no doubt that some people are born with a talent to lead but I believe it’s also true that all of us can develop better leadership skills and when we do our organization will be transformed.  
  5. Michael E. Gerber, The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It – Gerber’s book is a must read if for no other reason than it reminds us that business is essentially a system and that anyone who approaches it in a systematic manner can master.  I have placed this selection at number 5 but if I were giving this reading list to a client I’d start with Gerber.  If the client was excited by what Gerber has to say then I’d know he/she is interested in creating a better business in which case the other books would have more relevance.

My old man used to say, don’t just stand there do something!

It took me 30 something years to fully appreciate what he meant but when I did it was a great lesson.  When a new business (read accounting or advisory practice or any business for that matter) is started hunger for growth leads to the founder(s) being very active on the marketing front.  They spend a lot of time working ON their business as Mr. Gerber says. Continue reading “My old man used to say, don’t just stand there do something!”

Are you thinking about the future of your firm?

In 2002 I published a lengthy White Paper on the competitive landscape of the accounting profession.  Ten years have now elapsed so I thought it would be an interesting exercise to review and update it.  I’m pleased to say that for the most part my thoughts relating to the changes, challenges and opportunities faced by the profession have been close to what’s actually happened. I intend to release a revised White Paper in due course but I thought it would be timely to invite you to re-visit one part of the White Paper that I think is very important in the current economic climate. Continue reading “Are you thinking about the future of your firm?”

On Benchmarking

If you know me well you’ll probably know that I don’t have much time for benchmarking and never have.  I believe it encourages people to drift towards mediocrity and to aspire to being amongst the pack albeit at the better end of the pack perhaps. Continue reading “On Benchmarking”

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