Can accountants be creative and innovative?

I was surfing the web the other day and came across a most interesting piece on making a company more creative. The article wasn’t specifically talking about accounting firms, but there are are some great tips on how any business can help promote and foster creative thinking. The article, “12 Tips to Make Your Company More Creative” was written by Ronald Brown and can be found at http://mashable.com/2011/11/08/company-creativity/

Although it seems to be on the decline, creative capacity is more important than ever. Many large companies deem creativity a major competitive advantage.

So, where do you start? What will be your strategy to bolster not only your own creativity, but also that of your business?

First, you’ll need creative employees — then, an environment that fosters and promotes that creativity. Let’s divide these categories further.

Employee Creativity

  • Hire for innate creativity. Even if a candidate’s domain skills come first (e.g. engineering, finance, marketing), stay on the lookout for creative skills – it’s easy and relatively inexpensive. Bringing people on-board with high “creativity quotients” will pay off enormously in the long-run.
  • Assess current employees. Once you identify creative types within your organization, deploy them for special projects or team leadership positions.
  • Train for creative thinking skills. It’s a structured and rich process, and everybody, regardless of inherent abilities, can improve their creativity with practice.

Personal Relationships

  • Teach marketing principles. Since business success is so much about marketing, and marketing is so much about creativity, it would be hard to imagine a more fertile ground for sharpening creative thinking skills. Advertising and design (product and graphic) tasks are also effective in getting creative juices flowing.
  • Allow for reflection time. Employees need places where they can get away from mainstream energy and potential conflicts. Creative professionals recognize solitary time as part of the “incubation” process, necessary for clarifying and polishing ideas.
  • Encourage play. Impromptu team recreation builds trust and reinforces collaboration. Make it accessible on a daily basis.
  • Mix it up. Multi-cultural and mixed gender teams tend to have higher creative output.
  • Visit customers. Ideas are most valuable when they are put in context of customer needs and circumstances. Learn from customers, allow them to suggest ideas, and be sure to share concepts, drawings and prototypes with them.
  • Encourage industry networking. Interaction with peers builds tacit knowledge.

Management Involvement

  • Define a powerful vision. Vision is the single best agent for galvanizing teams. While high performance teams need the freedom to direct their own time and efforts, management directs the process through a vision that team members can get excited about.

Physical Surroundings

  • Create big open spaces. There’s a reason design firms and ad agency offices are visually free flowing, interesting, and non-constraining: environmental clutter is distracting and stressful.
  • Create friendly spaces. Individual workspaces should put people at ease. Some prefer music. Some work well with clutter, like piles of books or papers, while others like things tidy and minimal. The goal is to meet everyone’s needs the best way possible. Bottom line, you want employees to feel good being at work.

See you next time,

James E

Missed opportunities

The other day I was chatting with a CFO on the phone. To protect the innocent lets call him Sean as in Sean Connery (the slightly older version).

Sean is an accounting and finance professional with over 40 years experience. Over the last 15 years or so he has worked as a “gun for hire.” His speciality is to go into a business that is experiencing trouble and turn the place around.

Sean’s current assignment is as an interim CFO of a small to medium manufacturing company. This particular business has been in operation for 50+ years and employs over 100 people. For some reason, the business has been trading at a loss for the last 10 years. Sean, with a fresh set of eyes and some skill, within one year has turned around the business from a loss to a profit.

Now I know what you’re thinking … that’s easy James. Sean simply went in, sacked a lot of people, controlled some other costs and got the business to make money. No – it didn’t happen that way. Rather, Sean asked questions of people on the shop floor, middle management and of course of the owners. Through a combination of asking the right questions and some digging into the financial records, Sean was able to uncover a fundamental flaw. The flaw was both simple and destructive. Believe it or not – no one knew what margin the business made on the products they manufactured. Or put another way … that they didn’t really know what it cost them to produce their products. So how on earth can they make a profit when they didn’t know the cost of what they were making.

In my phone chat with Sean he told me that, armed with the above knowledge, it was a relatively straightforward process to make the necessary adjustments to get the business back to profit. A success story!

However, it was Sean’s next comment that caught my ear the most. He noted, with some frustration and amazement, the fact that that the external auditors and accountants that this business had been using over the last 10 years (trading at a loss every one of those years) weren’t proactive enough to at least ask the question “Why the loss was occurring year after year?” As Sean said to me, “It just reinforces the stereotypes of accounting firms and their people – they look through the review mirror and don’t come up with ideas to tangibly help their clients. They are more focused on ticking forms about the past and making lodgement deadlines. Its very sad – 10 years of missed opportunities.

Now compliance is important, but clients see it as a necessary evil – not as something that helps their business. Lets face facts, the majority of compliance services are simply commodities. The now and the future for the profession lies in advisory work which helps businesses make more money, save more money or save time.

Until next time,

James

Help your client get answers

Sorry everyone. My standard practice with this blog is to post 3 times each week. However, as you may have noticed there was no mid-week posting. Mea cupla. The reason is that I’ve been busy trying to keep clients happy. Not a bad reason, but nonetheless, I feel bad. Please forgive me.

Last post I ended with the promise that irrespective of the size of your accounting firm you can be innovative and proactive and add tremendous value to your clients just like the big end of town.

Here is just one cost-effective idea for you to play with.

Select one your clients that you believe the relationship can do with some improving and invite them to a “10 solutions” breakfast or lunch. Ahead of the meet, ask your client for the biggest one or two challenges they are facing in their business currently. More likely than not the challenges they identify won’t have anything to do with tax or audit or something that you feel more comfortable with. The client will probably come up with challenges like attracting and keeping good people, marketing, sales pipeline and other such things. Don’t worry – at this stage just knowing what their challenges, problems and issues is all you need.

Now that you know the challenge(s) build a small “task force” within your office (for some accounting practices the task force might be really small – you!) and start to gather ideas, thoughts, notions, perspectives – anything at all ahead of the breakfast/lunch meeting with your client.

You’re probably thinking now – well that’s fine James but what if my client’s challenge is in an area that I know nothing about? Don’t panic. This is a great opportunity to show your client that you are indeed their trusted business adviser for good reason.

Lets say, for example, their current business challenge is attracting and keeping good staff. Here are some simple ways you can build a killer list of ideas and solutions to their problems:

  • Do a web search. You will be amazed what appears on page 2 onwards of a Google search!
  • Have a chat with some of your other clients to ask what they do to recruit & keep good staff.
  • Ask a general question on social networks like LinkedIn. The responses you get from around the world will give you a breadth of ideas that will surprise you.
  • Approach a recruitment firm you know of and ask for their input. Don’t give too much away – otherwise they will hound you for work they could do for you for years 🙂

Once you’ve assembled a good list of ideas hold the meeting with your client and brainstorm possible solutions to their problem. Don’t take out your “something I prepared earlier” list – keep that resource to yourself. In the meeting it’s important that your client is part of the process that generates the solutions. Your list will simply serve as input to that process.

The above exercise is designed to show one important thing – that you can help your client (either directly or indirectly) in any and every aspect of their business. Put yourself in the shoes of your client for a moment and ask the question, “Would you prefer an accountant who is trying to help you in new and broad ways or one that just sticks to ‘doing the books’?”

Go on give it a go – what have you got to lose?!

Until next time,

James E

 

 

Accounting firm or an ideas factory?

A few days ago I was having lunch with a client of mine who had recently joined a 2nd-tier accounting firm having left one of the Big 4 for greener pastures. During the lunch my client told me about an exercise his old firm would perform on behalf of clients. It blew my socks off!

From time to time this Big 4 firm would hold a sandwich lunch for all their staff & partners in each of their offices around the country in a given week. The Brisbane office would hold their lunch on Monday, Melbourne on Tuesday, Sydney on Wednesday and so on.

The purpose of the lunch was to get as many people together – partners, directors, managers, graduates, support staff and others sitting around a table to talk and think about a particular problem or two and how they would solve it. Each table had a facilitator to help guide the conversation. The problems were real world issues that clients of the firm were facing. The purpose of the lunches is give the clients ideas they can use to solve their current business challenges.

The Big 4 firm would make an offer to their clients or even a prospect they are trying to win along the lines of, “How would you like a thousand of our staff who are amongst the best and the brightest in the market work on your problem(s)? By the way … there is no charge. It is our way of adding value to you and showing that we are here to help.”

What business or organisation would say no to such a fantastic offer? Having a thousand men and women of varying experience working on ways to solve the problems you have in your operations, marketing, recruitment and strategy is an incredibly powerful and compelling offer. The cost to the Big 4 firm  to facilitate the “ideas week” of staff lunches? Well it was simply the price of providing sandwiches and orange juice to their staff which of course would be a few thousand dollars. But think of the tremendous impact such an exercise can have on the clients and prospective clients of the firm.

Now … I know what you’re thinking. That is fine for a Big 4 firm – they have truckloads of resources and big budgets to do such things. However, since the lunch I’ve been thinking about ways in which smaller accounting firms can provide similar value for their clients irrespective of their size.

Tune into the next post to find our how!

All my best,

James E

 

Accountants – sell yourself!

As you will notice from time to time I like to bring you the best of what I’m reading around the place.

Here is an extract from a blog from entrepreneur.com (http://www.entrepreneur.com/article/220658) that is an excellent reminder that EVERYONE – tinker tailor soldier baker and accountant is involved in the art and science that is SELLING! So often I meet partners, directors and managers within accounting firms both big and small who see “selling” as beneath them – believe it or not.

As a business owner, you’re in sales whether you think so or not. Every day you have to sell yourself — and your product or service — to grow your business. If you’re not sure you have the personality to succeed in selling, consider these 13 simple rules to create a superstar sales mindset.

1. Stay hungry. Every good salesperson I’ve ever encountered is driven. They have a strong work ethic and a high energy level. They work harder and longer than their peers. When the economy is poor, they are still out there pounding the pavement, making calls.

2. Never compromise your integrity. I’ve always believed that telling the truth is the best policy. In business, especially today, it’s a must. A few years back, the Forum Corporation in Boston studied 341 salespeople from 11 different companies in five different industries. Their purpose was to determine what separated the top producers from the average producers. When the study was finished, the results were startling. It was not skill, knowledge or charisma that divided the pack. The difference came down to one trait: honesty. When customers trust salespeople, they buy from them.

3. Stay positive. Your attitude, not your aptitude, will determine your altitude. Success is 90 percent mental. You can alter your life by altering your mind. In tough economies, it may not be your fault for being down, but it is certainly your fault for not getting up. You have to be a believer to be an achiever.

4. Be authoritative. Sales superstars know their products backward and forward. They also know their competitors’ products and are prepared to point out the differences.

5. Get prepared. I still remember the old Boy Scout motto, “Be prepared.” Well, it’s true. It takes a lot of unspectacular preparation to produce spectacular results.

6. Mind your reputation. You can’t buy a good reputation — you must earn it. If you don’t have a positive reputation, it will be difficult to be successful in whatever you do.

7. Be genuine. I have never known anyone to buy from someone they don’t like. Likability matters. Are you genuine? Pleasant? Easy to talk with?

8. Put your best foot forward. You never get a second chance to make a good first impression. Are you neat and well groomed? Underdressed or overdressed?

9. Set goals. Winners set goals; losers make excuses. Goals give you more than a reason to get up in the morning; they are an incentive to keep you going all day. They must be measurable, identifiable, obtainable, specific — and put them in writing.

10. Become a customer-service fanatic. I’ve often said the sale begins when the customer says yes. Good salespeople make sure the job gets done on time— and done right. There’s one thing no business has enough of: customers. Take care of the customers you’ve got, and they’ll take care of you. You must have a fanatical attention to detail.

11. Remember to listen. You can’t learn anything with your mouth open. For too many people, good listening means, “I talk, you listen.” Listening is a two- way process. Yes, you need to be heard, but you also need to hear others’ ideas, questions and objections. If you talk at people instead of with them, they’re not buying in — they’re caving in.

12. Keep it all in perspective. It is impossible to underrate the importance of a sense of humor. When there are inevitable setbacks along the way, learn to laugh about them.

13. Develop a thirst for self-improvement. You don’t go to school once for a lifetime. You are in school all your life. Sales superstars are constantly working to become better. They take courses, read books, listen to audiotapes and inhale everything they can to improve.

Bottom Line: A salesperson tells, a good salesperson explains… and a sales superstar demonstrates.

Nothing more to add here!

See you next post,

James E

Is bigger better? The NO case

I asked a CFO of a small-to-medium business (Revenue $80m employing 100+ staff) how important an accounting firm’s brand is to him when he is looking to engage external help/advice. This is what he had to say.

I wonder whether brand is quite the right word. Perhaps reputation or their perceived level of expertise is better. But for the sake of the question, let’s stick with brand. The brand itself in the first instance, I wouldn’t say is that important. I would be more interested in speaking to the people who were going to be doing most of the work and looking at what their experience is, their qualifications, or how “good” that particular individual is. Brand doesn’t really come into it. Look at the case of Arthur Andersen which at the time was a major global accounting brand. They were the auditors for WorldCom, Enron, HIH, Ansett and One Tel – not a very good track record!

You can talk about the brand of a major multinational firm, but they’re only as good as the person that you’re going to be dealing with week to week. There is always going to be variation in the quality of the people within a large organisation. So, I wouldn’t say that brand itself is that important. I probably look at the professional firms generically and say, “Big Four, second tier, smaller…” In my mind, I don’t see any difference between any of the Big Four firms. I wouldn’t really know whether one was better than the other. Furthermore, I wouldn’t know if one individual within the big firms are better than the other.

Some interesting thoughts. The insight that captured my imagination was his statement regarding the “person” – You can talk about the brand of a major multinational firm, but they’re only as good as the person that you’re going to be dealing with week to week. There is always going to be variation in the quality of the people within a large organisation.”

Leaving aside the important areas of  support infrastructure, methodology, staff training and development it is the individual which makes the biggest difference to the client relationship. The other areas should be seen as hygiene factors (their impact is felt when they are not present)

Bye for now,

James

Is bigger better? The YES case

I conducted an interview with another CFO recently and asked him the question about the importance of an accounting firm’s brand. This chap has given a qualified YES – the brand is important. For the time being I will withhold his name but suffice to say his organisation is big, complex and has high expectations of its external accounting  firm(s).

In professional services it’s always the individual it comes down to in terms of expertise and the quality of the work that you get, but you rely on the professionalism of the brand of the overall organisation as to the resources that they send to you.  So at the end of the day it’s very important, but it comes back the integrity of the organisation and the professionalism of those organisations.  If we were looking to appoint a new auditor, for argument’s sake, and I was aware of a local audit firm that’s just gone through some problems with some audit clients, I would probably tend to steer away from them because I would feel that their processes had broken down somewhere that meant that I was taking on trouble by adopting them and therefore I’d go elsewhere.  So, their quality through their professionalism is very important at the end of the day, because you’re paying for that expertise, you’re paying for those services, and in most cases you want something that you can rely on to take to other parties – not just internally – therefore that name has to stand up in front of those other parties that you’re using that work for as well.

They (the external accounting firm) ultimately have to present our accounts to their investors, which are institutional investors, and they wouldn’t be happy if someone was being used that they weren’t familiar with in most cases I would imagine. For purposes of quality assurance with other parties that we would use that information for the brand is absolutely important.

Size does matter for some clients. That being said the individual must be up to the task of delivering a consistent & sound service that provides an effective outcome for the client.

See you next post,

James E

Do accountants make good first impressions?

We have all heard the old saying – you never get a second chance at a first impression. As I’m sure you’ve read me write before … cliches are often cliches because they are true!

Anyone engaged in professional services, most of all accountants (given that a lot of people outside the profession see them as boring, unimaginative bean counters) need to make a good first impression when they meet with people for the first time and try to build rapport.

The other day I found a great article in Forbes magazine quoting the research of a couple of academics from Princeton University. For the full article go to http://www.forbes.com/sites/yec/2011/11/02/5-ways-to-make-a-killer-first-impression/

Here are a few ways you can make sure people’s first impression of you is a good one:

  1. Set an intention. The most important thing to do for giving a good impression is to set your intention. This is especially important before any kind of big event where you would be meeting a lot of people — i.e. conferences, networking events or friend’s parties. As you get ready or when you are driving over think about what kind of people you want to meet and what kind of interactions you want to have. This can be an incredibly grounding experience and works very well to focus on what kind of energy you want to have for your event.

  2. Think about your ornaments. Clothes, make-up, jewelry, watches and shoes are all types of ornamentation and people definitely take these into account when making initial judgments. I highly recommend getting some of your favorite outfits or ornaments together and asking friends you trust what they think of when they see them. For many men, they do not realize that their watch can say a lot about them. For women, purses and large earrings or jewelry can also indicate a lot to a new person they are meeting. Make sure that what you are wearing and how you do your hair or make-up says what you want it to say to the people you are meeting for the first time.

  3. Be Conscious of Your Body Language. Body language is a crucial part of first impressions. Everything from your posture to how you carry yourself to the way you’re angling your body. Often, simply being aware of your body language can result in immediate improvements. Another way to examine your body language is to look at yourself on a video walking around a room. Subconscious cues to keep in mind include noticing where you point your feet, the position of your shoulders, and the way you shake hands.

  4. Avoid bad days. People who go to cocktail events or mixers after having had a bad day typically continue to have a bad day. If you are in a depressed or anxious mood, others will pick up on this from your facial expressions, comments and body language. If you’re having a bad day, stay home! Otherwise, find a way to snap yourself out of your bad mood. I find working out or watching funny YouTube videos before events often gets me in a more social, feel good mood.

  5. Be interested and interesting. If you are truly interested in meeting people and are open to learning about who they are, they will get this in a first impression. We have all had the experience of meeting someone and knowing instantly that they were dragged here by a friend and are just waiting to get out the door and head home. When you are meeting people for the first time approach others with a genuine interest in who they are. This is often contagious and you will have better conversations and lasting connections when you are interested because they become interested.

See you next post,

James E

Give it to me straight

We have all heard the old saying – “give it to me straight.”

Usually in the movies someone is sitting in a doctors office on a chair on one side of the desk with the doctor sitting on the other side.  The doctor looks worried, is fidgety and is searching for the right words to use. The patient (usually a man) calmly asks the doctor to “give it to me straight.”

The doctor replies, “Marshall … I have good news and bad news. Which would you like first?”

Marshall says, “Give me the good news Doc”

Doctor replies, “You have one week to live”

“What? One week to live! That’s the good news? What on earth is the bad news?, Marshall shouts out.

The Doctor sheepishly admits, “The bad news is … I meant to tell you the good news last week”

Funny story, but unfortunately many clients of accountants, are victims of not being told the bad news early enough.

A good friend of mine is a management consultant.  He is highly skilled and experienced and earns a very good living. Being self-employed he has to fulfill the usual compliance requirements for operating a small business. As you know, in Australia one of these requirements is to lodge a quarterly business activity statement (BAS). Along with lodging the documentation there is usually an amount of tax payable.

For some strange reason my friend hadn’t lodged his BAS’s for 12 consecutive quarters. For some strange reason his accountant didn’t remind or raise the issue with my friend not until one day four years later he had a difficult chat with his client. Needless to sy it was not a nice discussion – the outcome of which was a bunch of fines, interest on what was owing, and the balance of the tax payable – a truckload of money and a blemished record with the Tax Office.

A question for you … “Who is at fault … the client or the accountant? Legally its the client. Morally it maybe the accountant.

What do you think?

See you next post.

James E.

Honesty & accountants – a good marriage

A few days ago I was interviewing a CFO for an extension to the book “What do Accounting Clients Really Want?” and he shared with me a most interesting (& disappointing) story about an recent experience he had with a top 10 accounting firm.

This CFO, lets call him “Jack”,  asked the accounting firm to provide with advice relating to a specific & complex tax issue. Given the importance of the task he was expecting a fairly sizable bill so he wanted to make sure that he got the scope for the work as well-defined as he could. So he did some basic research – read through some articles on the web and in journals and the like and presented the accounting firm with, Jack thought, a clear task and expected outcome.

A week or two passed and the accounting firm presented their advice and a bill for $30,000. As he was reading through the document, Jack noticed that a lot of the content look familiar. With a few clicks of his browser, he discovered that much of the advice in the document came straight from a government website. All the firm in question had done was to write the background & introduction and provide a summary at the end. In other words, they “top & tailed it”, put it on their letterhead and passed it off as tailored advice.

Understandably Jack was annoyed, disappointed and angry and for obvious reasons refused to pay the $30,000 bill. When “found out” by their client, the accounting firm had no decent response to make to Jack and were embarrassed by the situation. The real issue for Jack in this whole sorry affair was not that they did it in the first place, but thought they could get away with it.

Jack will never use this firm again. Not only were they unprofessional, but were dishonest in the claim that they were providing Jack the tailored advice his business needed. Clearly, they weren’t tailoring anything. As Jack told me he could have got one of his primary-school aged children to do what a top 10 accounting firm had done and pay them a whole lot less than $30,000!

See you next time,

James E