Ric Payne's Blog: The Consulting Accountant
Better Business. Better Life
In Principa I talk a lot about the the centrality of 3 P’s — People, Positioning and Process — to the Delta4 business system we have created, so my antenna was alerted when I heard the the 7 P’s mentioned! Continue reading “Proper Prior Planning Prevents Piss Poor Performance”
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While I was fiddling around in my office on a Saturday afternoon preparing to create a training video the phone rang. It was from a Principa Insider Member – who therefore holds a Saturday-afternoon-interrupt-Ric pass. She wanted an answer to the question: why should I refuse to do work for a small tax client when I can still make some reasonable money from it?
I did not realize it at the time but the camera was rolling and the entire conversation was caught on video. Nothing of a confidential nature was discussed so I thought I’d share the views I expressed because this is certainly not the first time this question has been put on the table and I doubt that it will be the last.
I’ve been working on some pretty amazing initiatives that I know will turn a few heads in the coming months and in the course of doing some research I recently came across something that I thought I’d share. It relates to the incredible advances that are being made in neuroscience due in large part to Continue reading “The Power Of a Word and The Need For Management Innovation”
My attention was drawn to an interesting blog posted on the accountingweb.uk portal this morning which addressed the question “can accountants make good salespeople? The author of the post was discussing some thoughts expressed by Paul Shrimpling a professional service firm marketing specialist. Click here to get to the blog.
The blog is definitely worth reading if only because it references a very useful sales meeting protocol developed by Shrimpling under the acronym PROGRESS where P=plan the meeting, R=rapport is essential, O=opening the meeting, G=gather relevant information from the client, R=reveal your solution, E= engage with the client, S=seal the deal, S=see it through by delivering on your promise. This protocol reflects the essence of our own recommended sales process and I know it will work if implemented and practiced.
Of less interest in the blog was a discussion of the question “can accountants sell?” This was presented in the context that the increasingly competitive landscape mandates that they need to develop this skill. The answer is OFF COURSE accountants can sell. Shrimpling is of the view, as am I, that it’s not a question of can, it’s a question of will. Or as some sage once said don’t say “I would if I could”, say “I could if I would.”
I commented on the blog and I thought I’d restate my thoughts here just for fun …
Selling starts with two fundamental questions: first, can I add value to this person? and if yes, am I willing to get in front of him/her and explain how? The first question is about client selection, the second is about self-confidence.
I often get asked to recommend a great sales training book. There are thousands out there–just Google it! My recommendation is an oldie but a goodie–How to Win Friends and Influence People by Dale Carnegie. Interestingly, Warren Buffett says it was one of the only TWO books that changed his life, the other was Ben Graham’s book The Intelligent Investor.
Selling is something we all do all the time (see Dan Pink’s latest book To Sell Is Human: The Surprising Truth About Moving Others) in all aspects of our lives as fathers, mothers, siblings, partners, managers, leaders – you name it! I can’t think of any life role in which selling is not a central part of the communication process intended to influence people for good and sometimes bad. To suggest that accountants can’t sell is absurd. They may choose not to commit to add value or not to develop the skill to articulate how they could add value but that is different to saying they can’t sell because of some personality issue. When I was in practice I passionately believed that it was my professional responsibility to create value for my firm’s clients if and when I could see an opportunity to do so.
I don’t believe this an issue of responding to competitive pressure. It is now, and always has been, a a question of our responsibility and our willingness to make a difference to the lives of people. That’s a defining characteristic of a profession and a professional. Better business means a better life. Accountants are in the perfect position to help people make better choices in their business and consequently to experience better outcomes. Spend more time seeking clients in respect of whom you can create value and less time chasing easy, mindless work and everything will change for you
I refer you to a recent Harvard Business Review Blog post by Jack Hughes called What Value Creation Will Look Like in The Future that was published on May 17, 2013. Hughes makes the point that during the last 100+ years organizations have focused on the efficient management of work to the point where the marginal gains from further improvements are not likely to be game changes or sources of sustained competitive advantage. Continue reading “Value Creation versus Operational Efficiency”
When Bill Hewlett and Dave Packard graduated from Stanford in 1937 they decided to start a new business. They subsequently memorialized their early discussions in a set of “founding notes” which, in relation to the question of what they Continue reading “It’s The Business Model Not The Product That’s Important”
The first part of the title to this post is the name of Marshall Goldsmith’s brilliant best selling book. It’s a book, among many, that I strongly recommend to anyone who wants to excel in life and business but that’s not the purpose of this post.
One of the really big challenges business people face is moving from working IN their business to the more leverageable (is that even a word?) function of working ON it. OK so you’re probably thinking “we’ve all heard about this, Michael Gerber talked about it in The E-Myth so let’s move on.” But hold on, I want to make a point.
In professional service firms from the time you start working at “the firm” your performance is judged primarily, and in some firms exclusively, on the basis of the quality and productivity of y our “IN” work. You can’t help therefore aligning your work behavior to the belief that you get rewarded (as in promoted, bonuses, more responsibility and ultimately equity) for doing well at the “stuff” the firm does for its clients.
The better you are at the IN work the more likely you are to be made a partner. Then you join rank with a bunch of other people who share the belief that doing IN stuff is where firm value is created–which is partially correct, but it’s not where significant firm value is created.
The challenge faced by many firms (maybe most firms is closer to the truth) is that when the majority of partners are “IN-orientated” people because that’s how they got there, the firm’s organic growth peaks and then stabilizes so that the only way it can continue to grow is through mergers and acquisitions. Now, I’m not saying M&A is necessarily a bad way to achieve growth but it rarely yields superior profitability and superior profitability (as measured by net profit per partner or net profit margin) is the measure of competitive advantage which in turn is the purpose of strategy.
Goldsmith is so right. What got you to the position of partner will not get your firm to the next level of performance. That requires a whole new set of skills not to mention an organization structure and governance model that recognizes the critical importance of the need to separate ownership from directional leadership.
I’ve used the phrase “directional leadership” to distinguish it from leadership generally because leadership should be exhibited at all levels, by all people, all the time. But let’s not go into that now. By directional leadership I’m talking about that person or group of people who’s job it is to be thinking about ways to re-design the business model to better meet existing or emerging customers’ needs. This involves, among other things, conceiving, communicating and ultimately orchestrating a different and exciting vision for the future role and growth of the firm and the relationship it has and creates for its clients and its team members.
This is the most important element of the ON stuff.
Of course it also involves seeking and implementing best practice solutions in your current business process but most other firms are doing that so it tends to diffuse rapidly and doesn’t give any firm a sustainable competitive advantage–it’s one of those “necessary but not sufficient” operational initiatives that manifests in competitive convergence.
And that brings me to the main point I want to make here.
New partners need to be made aware that the greatest contribution they can make to the firm is get good at the ON things. Things like contributing to the creating of a great vision, things like developing your people especially through training, mentoring and delegating, things like networking outside traditional circles and getting outside their traditional comfort zones, reading widely and consciously challenging their beliefs about how a firm should be run.
New partners should ask themselves the question: what will it take for me to be the best? Why not ask that question? I’m sure you would not ask yourself, what will it take to be the worst? Would you even ask yourself , what will it take to be average? Seriously, who is going to do that so why not seek to be the best and THAT is ON stuff fair and square. This is elegantly stated by Seth Godin in The Dip, when he says at page 13:
People settle. They settle for less than they are capable of. Organizations settle too. For good enough instead of best in the world.
If a new partner is not interested in, or naturally endowed to, work ON the business then she should focus on working ON herself! By that I mean work “ON” being the best tax or audit guy in the world, or the best business development guy in the world, or the best team developer in the world, or the best rainmaker in the world. Don’t settle for less and don’t just be an ordinary IN person. IN people don’t leverage. Leverage is the source of synergy. Synergy is the source of growth both for the organization and the people in it.
I get asked this question quite often and I’m fully aware of the motivation behind it. By that I mean those people who do not want to let go of time-sheets ask it because it is a really tough situation to deal with as a practical matter and therefore they feel that it’s too hard so let’s stay Continue reading “How do you price jobs that have unknown dimensions without timesheets?”
The late Peter Drucker once wrote “In a few hundred years, when the history of our time is written from a long-term perspective, it is likely that the most important event those historians will see is not technology, not the Internet, not e-commerce. It is an unprecedented change in the human condition. For the first Continue reading “Leadership, Management and Team Member Engagement: The Challenge and The Opportunity”
I recently read an article published by Wharton in its knowledge@wharton series that is particularly relevant for today’s professional knowledge firms. In keeping with Gary Hammel’s advice in his book The Future of Management the article talks to the issue of what employers can do to create a work environment that creates an opportunity for team members to excel.
One way to do this according to Wharton Professor Adam Grant is to “give employees the chance to customize their own employment arrangement,” because that “helps employees feel uniquely supported and valued.”
Think about an employment contract as a restaurant menu: An employer offers an employee a set of options he or she can choose from that are of similar cost to the employer…. We will probably be seeing a more concerted effort at this kind of mass customization in the future. An example of an option that give employees more autonomy over how their jobs are structured include the opportunity to telecommute one day a week or to negotiate degrees of scheduling flexibility.
In a Robert Half survey released in January 2011 executives were asked to identify employee perks they plan to offer, or already offer, in 2011 subsidized training or education came in highest (33%) followed by flexible work hours/telecommuting (27%), mentoring programs (25%), matching gift programs for charitable contributions (15%), on-site perks such as childcare, dry cleaning, fitness centers and cafeterias (11%), subsidized transportation (10%), sabbaticals (8%) and housing or relocation assistance (7%).
According to Bill Driscoll, northeastern district president for Robert Half International, “We now have four generations in the workforce” at the same time — the Silent Generation (approximate ages: 66 to 85), the baby boomers (ages 47 to 65), Generation X (ages 30 to 46) and Generation Y (also known as millennials; under 30).
Grant points to what he says is a surprising conclusion in a study that came out in March 2010 in the Journal of Management, namely that “the differences between the work values of different generations are very small.” The study — led by Jean M. Twenge, a professor at San Diego State University, and titled, Generational Differences in Work Values: Leisure and Extrinsic Values Increasing, Social and Intrinsic Values Decreasing — “shows that if you rank values by generation, most members of each generation care about the same values in the same order,” says Grant.
At a “fundamental level, people want the same things out of work; they just have different ideas about how to get there,” Grant adds. At the top of that list are “intrinsic rewards,” such as “the opportunity to do enjoyable work, experience personal development and growth, and feel a sense of accomplishment.”
Valued second highest are extrinsic rewards, “which include status and promotions, and altruistic activity,” such as the opportunity to contribute to others and the community. Third on the list are friendships and leisure. “There are trends indicating that intrinsic and friendship values are decreasing, and leisure and extrinsic values are increasing,” says Grant. “But overall, members of the baby boomer, Gen X and millennial generations are more similar than different in their work values.”
He notes two caveats to Twenge’s findings. First, “we know that many members of Gen Y are less willing to delay gratification and like more immediate rewards than their predecessors.” Second, Gen Y scores slightly higher in terms of how important leisure time is to them, “which means that if I were interested in attracting Gen Y to my company, I would increase perks that help them carve out more time for their outside interests, such as flextime, or incorporate these interests into the work time, such as employer-sponsored volunteering.”
Twenge’s study offers a number of additional insights. For example, “contrary to popular press reports, Gen Y does not favor altruistic work values more than previous generations. And social values (e.g., making friends) and intrinsic values (e.g., an interesting, results–oriented job), were rated lower by Gen Y than by boomers,” the study says. Twenge at one point also notes that “despite the emergence of a mini-industry built on the assumption of a changing workforce, empirical evidence for generational differences in work values is scant.”
The observations from these studies are totally aligned with the four basic human needs that Stephen Covey refers to: pay me fairly, use me creatively, treat me kindly and give me meaningful work to do. Furthermore, it would seem that they apply irrespective of generational issues.
And with all of that said …. I repeat what I have been saying for several years. The most successful Professional Service (Knowledge) Firms of the future—however you want to describe yourself—will be the ones who figure out how best to address the workplace environmental challenges that will enable and empower their people to excel. This is where sustainable competitive advantage is going to reside in the future as it does right now.