Are all accounting firms created equal? (1 of 3)

In my travels in and around the professional services market I’m often asked … “Are accounting firms pretty much the same?” My short (and long answer) is a definite no.

As both a client myself, and speaking to many, many other clients of accounting firms all around Australia the way that accounting firms engage, serve and build relationships in their respective markets can be very different.

Different is fine. Human beings are different so it follows that the way accounting firms operate is also different. However, great accounting firms share some common elements. In the next 3 posts I’ll be sharing the top 3 elements, to my mind, of great accounting firms. They aren’t in any order of importance or significance.

1. Its all about people
Great accounting firms promote their people, not necessarily their brand. Leaving the Big 4 firms to one side and the valuable role they play in thought leadership for the profession (not just in Australia but globally), people buy from people. People don’t per se buy from brands. Brands, to a large extent, are treated as a hygiene factor by clients since they represent a certain level & standard of risk management, corporate governance, methodology and investment in the training and development of their partners & staff.

People buy from people. If I’m in the market to buy accounting services I don’t go into the main street of a city CBD, stand in front of a tall building and shout out, “Mr KPMG, I would like some advice on best practice in debt collection techniques please” That would just be silly (although quite amusing). Rather, I would seek out someone, via reputation or referral, who was an expert in the area and who I believed, after meeting with them, could help me. Depending upon my circumstances (if say I was CFO of a top 100 listed company I would probably need to use a Big 4 firm to keep the board, banks and shareholders happy), it would be secondary about which firm the expert was with. Brand would not be the most important thing to me. Most CFO’s I speak with believe and practice the same thing.

Great firms foster and support their people. Great firms provide the environment and appropriate support so their partners and staff can serve and build deeper and more intimate relationships with their clients. Great firms are more interested in sustainable relationships over the long term rather than short-term monetary gains.

Make sure to tune into the next post for part 2 in the “created equal” mini-series.

Bye for now,

James E

A client named Jeremy

Recently I met with a CFO. To protect the innocent lets call this chap Jeremy as in Jeremy Clarkson. Jeremy, until about a year ago, worked with an iconic muliti-national corporation in a senior finance role; he is now CFO with an Australian-based business with lets say a $100m+ revenue. One could say the organisations Jeremy had worked with were almost opposite ends of the business size spectrum. Jeremy is in his fifties and has had more than 25+ years finance experience. He has worked with a wide range of professional advisors – accountants, lawyers, technologists, management consultants and the like. You name it, Jeremy has worked with them. Jeremy is no plebe; he is an assertive senior executive who has a wealth of expertise in the finance and accounting fields. He is certainly no one’s fool and know what he wants. Set against this background I was both surprised and delighted to hear him express his delight when working with external advisers who “get it.”

Jeremy gets a kick out of advisers who do the following often and well:

1. Communicate early and often. If there is a problem tell me (the client) all about it. The sooner I know about it the more options we both have to solve it. Towards the end of a project you & I have much less options to work with and I will be less happy.

2. Share new ideas freely No idea is stupid. The more ideas the better. I want my advisers to share with me ideas they have learnt from their other clients in industries which may share common elements with ours. They actually do me (and other clients for that matter) a real disservice if they don’t share their thoughts and ideas to innovate and improve our current processes.

3. Work together to achieve a common goal I want to know that I have the full support from my advisers. Their fee should be a by-product of the relationship they have me (and the business) to work together to make our organisation better for the owners/investors, customers, management, staff and suppliers. This is what Jeremy expects and when it is delivered he is one happy CFO!

See you next post,

James E

The art of conversation

In working with accounting firms and individual professionals for many years, I have been somewhat surprised to learn a few things about Partners and staff.

The one thing that I have uncovered  is that a lot of senior accounting professionals are not good at having conversations with prospective clients.  It may be that they don’t like being out of their comfort zone or lack confidence in building new relationships or they simply haven’t been given the necessary training. I’m just not sure.

One of my clients, is a senior partner with a big 4 accounting firm. A few weeks ago I asked him what % of partners in the top 10 accounting firms within Australia, in his view, are able to proactively engage with prospective clients and build a mutually beneficial relationship. What do you think he said? 50%, 60%? He told me, in his opinion as a 30+ year veteran professional, it was around 10 to 20%. Wow! That is not good. I’m concerned that the professionals coming through the ranks – the graduates, supervisors, managers, directors and the rest not being shown good role models by their Partner-Principals.

Its not too late. Anyone – young or old, male or female, graduate or partner can change and improve the way they work. The first thing to change is to learn the art of conversation.

You might be thinking to yourself, “Come on James … you’re being waaaaaaay to simplistic!” With respect I don’t think I am. Sometimes I think that professionals be they accountants, lawyers, management consultants, engineers, architects, financial planners etc… tend to over-complicate their interactions with clients and prospective clients.

Let me leave you with this one thought –

There is no such thing as a worthless conversation, provided you know what to listen for. And questions are the breath of life for a conversation.

This was a quote by the American author, James Nathan Miller who lived and worked in the late 1800’s.

See you next post,

James E.

How to be happy & successful accountant (3 of 3)

Here is the last installment in our being a happy & successful professional. Below you’ll find the last 4 of Stephen C Ellis’s pearls of wisdom.

6. Be enthusiastic. Because we deal in rules, it’s real easy to fall into cataloging all the reasons something won’t work or why somebody shouldn’t do something. In fact, we lawyers take pride in being the first one to find fault with an idea. Makes us look smart. In my days as managing partner I would roll out a strategic initiative, and I could see my partner’s eyes starting to spin. Who would get the prize for being the first one to spot the flaw?

Clients want to do things – they don’t call you so they can not do things. They want to stay in the borders of the law, but they want to be told how to do what they want to do. And they want to know that you’re happy to be part of what they’re doing. There is no better way to end a client meeting than saying “This is going to be great” and to mean it. It’s fun to be charged up – to add energy to every conversation.

7. Trust yourself. You are a very bright person or you wouldn’t be here today. I think among the most important conclusions I came to as a young lawyer was that if I didn’t understand something, it was because the thing in fact didn’t make sense, not because I was stupid. Most of the times I’ve found myself in hot water it’s because I let a conversation continue past the point where I understood what was being said. And virtually every time I would say “stop, I’m not following this,” someone would come up to me after the meeting and say “Boy I’m glad you said that. I had no idea what we were talking about.”

8. Get involved. Organize the reunion or the bicycle race. Chair the church committee. Help people who have not enjoyed your good fortune. You have spent three years learning how to organize your thoughts, analyze a situation, and articulate action plans. Use those skills everywhere in your life. Stuff will get done, people will appreciate your initiative, and you will derive great satisfaction from making things better.

9. Be yourself. Here are my final two unappreciated but clearly true truths: The toughest lawyer is not the one who is the most obnoxious. Clients will say they want a tough son of a gun to make somebody life’s miserable, a real bulldog, etc. Don’t be that person. It’s been my 100% uniform experience that the bulldog only adds time, expense, stress and confusion to an otherwise inevitable result. Even clients can’t stand them after a couple of months. You want to be tough? Have the best preparation on the facts, the law and the strategy. Judges care only about those things, not a whit for bluster. Bullies are jerks, they wreck the profession for everyone, and you can beat them every time.

And finally and hands down most importantly, and please pass this on to your friends and your children, because it’s really important — Be nice and have fun. Just doing that makes life better for everybody, mostly you.

Good on you Stephen – great advice for any lawyer, accountant, engineer & professional consultant out there!

See you next time.

All my best,

James E

How to be happy & successful accountant (2 of 3)

Following on from Wednesday’s post here are a few more pearls of wisdom from Stephen C Ellis.

3. Look out for yourself. Nobody cares about you like you do except maybe your parents, and you won’t be working for them. My late and very wise father used to tell me to not worry about what people were thinking about me, because they weren’t. They were thinking about themselves.

4. Mentors are important, but they are only a resource. Accept that you are in charge of your success. Your employer may have a mentoring program, but nobody is mentored into a success. So if you think you need experience in an area, make it your business to go get it. Ask somebody; don’t wait for it to come along. Don’t wait for somebody to notice that you’re missing an important skill. Ask for a promotion – people aren’t watching what you do as carefully as you think or hope.

5. Determination matters. It matters more than intellect. The streets are littered with directionless geniuses with unexecuted good ideas. . Woody Allen had it pretty dead on when be said that 90% of success is simply showing up. You won’t suddenly have a great career. Nobody ever does. The secret is simple- great careers are the result of day after day deciding to do good work and being someone who others count on.

Tune in next time for the last installment of how to be a happy & successful professional.

Bye for now,

James E

How to be happy & successful accountant (1 of 3)

One of my all time favourite writers and thought leaders when it comes to the professions of accounting and law is David Maister. (visit http://davidmaister.com/ for more information).

A couple of years ago David Maister blogged about a speech given by a senior lawyer at a university’s school of law commencement for new students. Stephen C. Ellis is the managing partner at the law firm of Tucker, Ellis & West, what follows are extracts from his address to new students.

Although, Stephen’s address is aimed lawyers, the wisdom he shares can be applied to any professional – lawyer, accountant, management consultant, engineer, architect etc…

Over the past few years I’ve come to some conclusions on finding guideposts that will give us lawyers the best chance of being successful, in the sense of truly enjoying our lives and careers as lawyers. They are simple, some might say “trite”. But 36 years of listening to happy and desperately unhappy lawyers and watching colleagues succeed as lawyers and people, and some fail, I know that these may be cliché’s, but I also know they are true.

I’m going to talk about a handful of these “truisms”, only a couple of which I’ve made up, on being a successful lawyer in the sense of being fulfilled. Just so you know how close I am to wrapping up, there are nine of these, and they’re pretty short.

1.  Be someone others count on. Most folks talk a good game; very few come through. Clients come to you because they have a situation they cannot solve on their own. Most are not looking for an analysis of the law. Most want you to solve a problem. So solve it, don’t add to their problem by being hard to find, by missing deadlines, or by simply describing their problem back to them. It’s like going to the dentist when you have a toothache. You want it fixed and you want it fixed now. That’s what a client wants every time they talk to you. Walk in with a problem, walk out with a solution.

What they want is someone they can count on to make their lives simpler, to accomplish what they want accomplished. If you can simply do that, you’ll be sought out as an extraordinarily effective lawyer. And there is a real difference in your sense of self between being simply a resource; somebody who knows the law, and the person that people count on to solve their problems.

2. Be an interesting person, for your own good and so that clients think of you as more than a lawyer. A decent definition of hell is a dinner party companion who is a first year lawyer on the day after his or her first trial. Law stuff is interesting mostly to lawyers. In fact, it’s real interesting to lawyers, so that’s what we talk about all the time, just like you talk about law school all the time.

Force yourself to do be able to talk about more than law – read books, go to movies, be part of politics, go to lectures. You’ll meet people, you’ll be able to talk about things that other people find interesting, and you won’t burn out on your job.

The horror stories you hear about associates working 2500 hours a year? You will be surprised when you see how much of that is self imposed. These young lawyers get caught up in the chase and find that what they’re doing more interesting than anything else- so they become that boring self absorbed dining companion. The world’s full of great people with jobs and hobbies that are just as demanding and just as fascinating as yours, (assuming you make yourself get a hobby). Learn about them. You’ll be happier and much more fun to be with.

Tune into the next two posts (Wednesday & Friday) for the other seven pearls of wisdom from young Stephen!

All my best,

James E

You’re not an expert until you’re 31!

A few years ago I read a book by Malcolm Gladwell (pictured & the famous author of The Tipping Point & Blink!) titled Outliers.

The book is unusual, thought provoking and definitely worth reading.

One of the themes the book examines that struck me the most, was what Gladwell calls the 10,000 hour rule.
Rather than reinvent the wheel here is an excellent summary I found on the web.

The idea that excellence at performing a complex task requires a critical minimum level of practice surfaces again and again in studies of expertise. In fact, researchers have settled on what they believe is the magic number for true expertise: ten thousand hours.

Even Mozart, the greatest musical prodigy of all time, couldn’t hit his stride until he had his ten thousand hours in. Practice isn’t the thing that you do once you’re good. It’s the thing you do that makes you good.

The other interesting thing about those ten thousand hours, of course, is that ten thousand is an enormous amount of time. It’s all but impossible to reach that number all by yourself by the time you’re a young adult. You have to have parents who encourage, guide and support you. You can’t be poor, because if you have to hold down a part-time job on the side to help make ends meet, there won’t be time left in the day to practice enough. In fact, most people can reach that number only if they get into some kind of special program, or if they get some kind of extraordinary opportunity that gives them a chance to put in those hours.

Is the ten-thousand-hour rule a general rule of success? If we scratch below the surface of every great achiever, do we always find the equivalent of the Michigan Computer Center or the hockey all-star team – some sort of special opportunity for success?

Let’s see the idea with two examples: the Beatles, one of the most famous rock band ever and Bill Gates, one of the world’s richest men. What truly distinguish their histories are not their extraordinary opportunities. The Beatles, for the most random of reasons, got invited to go to Hamburg. Without Hamburg, the Beatles might well have taken a different path. “I was very lucky,” Bill Gates said at the beginning of an interview. That doesn’t mean he isn’t brilliant or an extraordinary entrepreneur. It just means that he understands what incredible good fortune it was to be at Lakeside in 1968.

These outliers were the beneficiaries of some kind of unusual opportunity. Lucky breaks don’t seem like the exception with software billionaires, rock bands and star athletes. They seem to be like the rule. http://www.bizsum.com/2page/b_Outliers.php

So there you have it. Assuming you’re working at something around 20 hours a week for 10 years (which is roughly 10,000 hours) you will more than likely be an “expert”.  So for the professional accountant, lawyer or adviser you really don’t know what you’re doing until your early 30’s.

Controversial or what?! 🙂

See you next post (I hope)

James E

Is this any way to treat someone? (2 of 2)

Following on from my last post here are just some of the things that happened in the meeting with said accounting firm.

I started the presentation. Just to remind you this was a presentation about their market so I would have thought they would have been somewhat interested. However, of the group of about 12 people, only 3 were paying attention. The other 9 were doing a combination of checking their Blackberrys, reading the notes for the next meeting & one guy even took a call!

My presentation style is very interactive and as such it depends on people listening to what is being said and of course making some effort on their part when asked to. At one point I asked one of the partners to tell me & the group what the term “proactive” means in the context of accountants working and communicating with their clients. Believe it or not, after a slight pause, he replied “I don’t know.” I (of course) don’t mind if people don’t know the answer to a question but what really disappointed me about this particular exchange is that he didn’t even try. When I asked him the question he was reading some notes for a meeting later that day; after he replied to my question, he went back to reading his notes.

A little later in the presentation I asked another partner about his thoughts regarding a section on accounting client expectations I had just finished outlining. He looked up from his sandwich and said “Sorry, I can’t answer that question … I wasn’t listening” Ironically a big part of the proceeding segment of the presentation was on the importance of listening!

The icing on the cake was the arrival of a 13th partner just over an hour late to the meeting. His excuse was that he thought the meeting was scheduled on daylight savings time since we had moved back to Eastern Standard time the day before. Hmmm … I don’t want to comment on what I was thinking at the time 🙂

I’m really sorry if the above sounds like a rant. I was just saddened that this one meeting almost typified so many things that people out there believe about accountants – dull, unengaged, conservative and unimaginative. In my experience over many years I’m glad to say that the opposite is true of the majority of accounting firms I have worked with and that I know 🙂

Until next time,

James E

Is this any way to treat someone? (1 of 2)

I had a most interesting experience last week. I was treated like a lost dog.

If you’ve been a reader of this blog for any amount of time you would know that last year I wrote a book “What do Accounting Clients Really Want?” published by Thomson Reuters. Since the book has come out I’ve presented to many accounting firms the salient points of the book as a way of getting the word out and promoting the book.

What I usually do is send the managing partner of an accounting firm a copy of the book along with an offer to present to the partners & selected staff followed by a q & a session completely free of charge. Nice and simple.

Well, I presented to a top 25 accounting firm last week that was one of the most telling speaking experiences of my entire career.

Here is how it all unfolded.

I was to present at a lunch time meeting of the partners of the firm set down for 1.00pm. It usually takes me about 20 minutes to set up my laptop and check that all the connections and my slideshow is working properly. So I asked this firm if I could have access to the meeting room at 12.30pm – this would give me a full 30 minutes to set up and not eat into the partners precious time in the meeting itself.

I arrived at the firm just before 12.30pm, spoke to the receptionist and was given access to the room along with the one the firm’s IT team to help connect my laptop to their in- house data projector. Great! Fantastic! Everything was going fine.

About 10 minutes into my setup I was asked to leave the room because it had been double-booked by one of the partners for an internal meeting. Hmm – not real good. I was confident everything would work fine so I left the room and waited outside as requested. Funny … I booked the set up time over a week before the meeting and was told it would be fine. This was dog moment No.1.

For most of the time I waited I was standing in a short hallway that led to the meeting room I waited there for about 15 minutes. About 8 people walked past me and not one person asked if I needed help or even who I was. This was dog moment No.2.

Just before 1pm I knocked on the door and asked if I could come in and finish setting up my equipment. I was told in rather short language to do it and got busy to make sure the presentation was working which only (thankfully) took about 3 minutes.

I then turned from the screen and laptop and faced the long boardroom table as people were speaking amongst themselves, checking their mobiles and reading papers. I stood there for 5 minutes. Everyone could see me and not one person introduced themselves let alone ask who I was. 5 minutes. Count to 300. That is a long, long time for someone to stand in front of a group of say 12 people and not one person acknowledge my presence. These are not just 12 random people from the street – they are 12 educated, experienced professionals who aim at helping individuals and businesses grow and prosper. This was dog moment no.3.

It may sound a little self serving but I could have been anyone – what if I was a client or key strategic supplier to the firm? Man alive – it is not a good look.

Ironically, the chap who invited me to speak was half an hour late to the meeting he arranged! Although to be fair he did apologise afterwards for his lateness.

Read the next post to find out what happened in the meeting!

See you next time.

James E.

Do Accountants matter anymore?

Last week I came across a group in LinkedIn that intrigued me so I joined.

What really got me was the title of a discussion with Ron Baker. – Do Accountants matter anymore? Ron is no light-weight. He is a member of the American Institute of Certified Public Accountant’s Group of One Hundred, a think tank of leaders to address the future of the profession, named on Accounting Today’s 2001, 2002, 2003, 2004, 2005, 2006, and 2007 Top 100 Most Influential People in the profession, and received the 2003 Award for Instructor Excellence from the California CPA Education Foundation.

Here is an extract from an interview with Ron in the official LinkedIn Accounting group that enjoys close to 500,000 members globally. Ron the founder of the VeraSage Institute, explains why the industry is on the verge of becoming irrelevant.

Question: What is the biggest risk to the accounting profession?

Answer: People are not going to like this, but I see the biggest risk to the accounting profession as irrelevancy. They’re high-priced bookkeepers and unless they move away from the idea that they’re historians with bad memories, who can only report on the past, who can only report on lagging indicators (they’re in trouble). … You go into a lot of these firms and they’re doing very low-level work and then they sit around and complain and moan that it’s a commodity. Well, sure. It’s low-value stuff, and if that’s all your doing, then you’re going to be stuck with government regulation revenue, and I see that as the biggest threat to our profession. I actually question whether CPAs are a profession anymore. We don’t have self-regulation. We don’t have autonomy. We’re ruled by peek-a-boo, we’re ruled by state boards of accountancies in a lot of states that are a majority regulated by non-CPAs. That’s not the definition of a profession. A profession stands for something. I don’t know what the CPA profession stands for anymore.

Visit the group’s link for the full story:  http://www.linkedin.com/groups/LinkedIn-Accounting-4297170?trk=myg_ugrp_ovr

See you next post,

James E