Should accountants eat lunch? (2 of 2)

Following on from the last post I now finish relating the story of Ron & Jim. Here is where we left them …

“I have to be honest here Ron. When you said at that first meeting that we’ll get together over lunch, talk some business and get to know each other I thought it was one of those empty & passing lines people use all the time.”

“Why do you say that Jim?”, Ron replied.

“Well my last accountant who was a great bloke and seemed to do an OK job for me didn’t take me out to lunch once. So its nice to have lunch and to get to know each other better”

“How long were you with your last accountant?”

Sadly, Jim said “14 years.”

There it is 14 years! Jim the client and his accountant hadn’t once met and broken bread together. I was almost too scared to ask Ron how many times Jim had had a coffee with the accountant (I’m probably thinking 14 – a tea or coffee was probably offered to Jim each year he visited his accountant’s office!)

I don’t know about you, but I think something special happens when you share food and drink with someone. It doesn’t have to be fancy – coffee & cake or sandwich & an OJ – it could be anything. What happens when you break bread with another person is that the barriers tend to come down. You’ll find that you will be talking about subjects and situations that you will never think would come up. That is the wonder of the meeting – because through that open conversation you as the accountant will definitely get to know the client much better and learn the things that excite, motivate and inspire them. You will also gain insight into those things that concern, fear and disappoint them.

Set against this background you will be in a much better position to help their business operate better and grow.

So … should accountants eat lunch? The answer is a resounding YES!

Until next time.

James E

Should accountants eat lunch? (1 of 2)

Last week I presented at a conference of small accounting firms gathered from all around Australia. I was asked by the conference organisers to give a talk on my pet subject of “What do Accounting Clients Really Want?” Although I was only needed to speak at the main dinner on the Tuesday evening I decided to attend all 3 days. I’m glad I did. I always enjoy the opportunity to meet new people and listen to their stories.

At breakfast on one of days I met a chap whom I’ll call “Ron” (not his real name of course). Over our meal I asked Ron about himself. He shared with me his background and family details and then moved on to tell me about his business. Ron is a partner in a small accounting firm with about 20 staff in Adelaide, capital city of a state called South Australia (since most readers of this blog come from outside Australia!) He told me a story about a client experience which I just have to pass on to you.

Ron, through a referral of one his long-time clients, won a new client. After the initial meeting to sort out what the new client’s needs were, Ron indicated to the other gentleman that he will be in touch down the track to meet again, talk through business and get to know him better. Let’s call this new client “Jim”.

A little less than 3 months later Ron contacted Jim and arranged to meet over lunch. They set a date, time and a place. At the lunch, Jim couldn’t help himself and told Ron exactly what he was thinking.

“I have to be honest here Ron. When you said at that first meeting that we’ll get together over lunch, talk some business and get to know each other I thought it was one of those empty & passing  lines people use all the time.”

Tune into the next post to hear what Jim says next. Hopefully you won’t be too surprised! Here is a small hint – 14 years 🙂

See you next post.

James E

Accountants – how to really upset your client! (2 of 2)

Following on from the last post, here is the second example of how the incumbent accounting firm upset “Jeremy” the CFO of a major law firm (as if the first example wasn’t enough!)

Once the tender was announced, and the accounting firms invited to prepare the documentation and presentations ready for the selection panel, Jeremy noticed that the incumbent firm didn’t show much energy or enthusiasm for the process. When they came around to actually present to the panel they came up with a standard, average run-of-the-mill pitch. Nothing really stood out. Jeremy got the impression that they had already given up.

Ironically, in spite of the weakening relationship over the last couple of years, the incumbent firm still had the advantage of knowing practically everything about the law firm since they had been the auditor/adviser for the several past years. They knew things about the law firm that none of the other 5 firms could possibly know.

I get the feeling from Jeremy that if the incumbent firm pulled something put of the bag and had directly addressed the problems with the relationship they would have been in there with a much better chance. Also I was surprised to learn that the incumbent accountants had helped (and were quite successful) in referring clients to the law firm. In spite of helping the law firm grow their fee base it wasn’t enough to help the incumbent accountants keep their business. They needed to do their core job better. Just goes to show – accounting firms need to do much, more more to keep their clients happy. Being a “standard accounting practice” is simply not enough these days.

The other lesson here is to not give up. There is always scope and room to reinvent & strengthen the relationship you & your practice has with its clients no matter how difficult or strained.

In summary, the law firm they went with a big 4 accounting firm and the incumbent lost between $100 to $150k of ongoing work a year – not including special advisory projects. Quite a price to pay!

Catch you next post,

James E

Small accountant beats big accountant

Although my day job is as a specialist headhunter in the accounting profession, I have some fingers in other pies. For example, some clients see me as a “honest broker” – rightly or wrongly. That is someone who can offer an objective sounding board and (perhaps) a slightly different perspective.

One of my commercial clients was planning to exit his business and has hired me as sounding board and has brought his accountant – a chap which he has used for several years – to join him as an adviser. I’ve met this accountant chap many times over the years. To protect the innocent let’s call him Matt as in Matt Damon.

Matt is not the most brilliant or technically gifted accountant in the world. However, he has a wonderful attitude of being really helpful to his clients. Matt goes out of his way to serve, ask questions and generally be available to his clients. None of what he does is ground breaking stuff – but he does the small things well and is consistent.

Some time ago the same client referred to above had a tax issue. I introduced him to a top-notch tax specialist at a big firm. To cut a long story short, the lack of service, care and attention from the big firm drove my client friend back to his local accountant – Matt. Not because of his technical ability or size of his firm – he went back to Matt  for two simple reasons. Matt showed care and was helpful. A one man band beat one of the world’s biggest accounting brands. He simply made a difference to his client by showing some care and helping!

My question to you – are you showing your clients care and are you helpful? I’d love to know what you think.

Bye for now,

James E

Should accountants exaggerate?

If you’re more than a one time reader of this blog you’ll know that I’ve been a big fan of the work of David Maister.

Here is a piece David originally posted in June 2006 which was titled “Maister’s Exaggeration Ploy” It is definitely worth a read!

I have noticed something very strange about engaging in discussions (and even disagreements) with people.

The more you disagree with them, taking the other side in an argument, the more vehemently they push their original point of view. However, if you don’t disagree, but restatetheir point in an exaggerated form, they often back down, or at least tone down their original statement.

This works so well, I’m thinking of copyrighting the idea and calling it “Maister’s Exaggeration Ploy.”

(I know, I know, there’s little new in this world and someone else probably thought of it before me, but I don’t think I stole this from anyone. And if I did, I can’t remember from whom.)

To see how my principle works, imagine a family member, say, a brother, who is upset at how he has been treated by a cousin. Your brother says: “I’m really upset with Jimmy. He had no right to speak to me that way!”

Because you want you brother to calm down and get over it, you might say: “Don’t let it bother you. Perhaps he really didn’t mean to be unkind.”

As valid as your point may be, you can bet your remarks will only serve to annoy your brother. After all, you appear to be defending cousin Jimmy by downplaying his intentions. This will set your brother off on another tirade, and also, probably, cause him to get annoyed with you, too.

But what if you had said: “You’re right! Jimmy’s a louse. He always has been! I think we should have nothing to do with him, ever again! Let’s leave him off the invitation list for all family gatherings from now on!”

Nothing with people is a certainty, but I would bet that your brother’s next remarks will be something like: “Well, maybe it wasn’t that bad. I’m upset, but there’s no point over-reacting.” You have calmed him down by agreeing with him and exaggerating his own point!

The same principle of exaggeration applies in the workplace. If your boss (or client) berates you because you were late in delivering something, don’t fight back, saying it was his or her fault (especially if it was!)

Instead, say: “I realize what a problem this has created for you. I’m really sorry that I caused you such turmoil. Can you help me figure out a way to prevent this in the future?” The boss (or client) will, with high probability, calm down and you’ll survive! Or at least the odds will be more in your favor!

Try my approach out. Let me know if it works for you!

See you next post.

James E

How should accountants communicate?

You would have heard the old saying, the medium is the message made famous by Marshall McLuhan the renowned Canadian educationalist and communication expert. Although Marshall coined the phrase almost 40 years ago, in today’s information smorgasbord, it is as relevant as it was back in the 1960′s.

Below is an excerpt from a good friend of mine – Antoni Lee. Antoni advises clients on how to perform at their peak when communicating in public. He is one of Australia’s most in-demand communication trainers for journalists, business leaders, corporate spokespeople, politicians, academics and the arts sector. Suffice to say he knows a thing or two about communication.

Below is an excerpt from Antoni’s site. It is titled “Which Communication Medium is Best?” You can read the full article by visiting http://www.rhetorica.com.au/?p=404

Given the need for accountants/advisers to clearly communicate to their clients and stakeholders, Antoni’s wisdom below will be most useful.

Choice confers freedom—or paralysis

An overload of options kills decision-making. At gut level we know, and statistically it’s true, that the more options we have, the lower the chance we’ll choose the ‘right’ answer. A prevalence of opinions and conflicting theories doesn’t help. In communication, it’s rich media versus media naturalness versus social naturalness, etc. How can we know which one is right? Neither do Internet searches provide clarity. Google’s 200m results for ‘Which communication medium is best?’ gave several stupid answers on page one, including three links to psychic hotlines.

Before answering our headline question it will be helpful to ask a few more questions to narrow down the communication context:

  1. Who is your audience?
  2. Why are you communicating?
  3. What is your message?
  4. What is your urgency?
  5. How much money do you have?

Your answers will likely point to some media over others.

Qualifications aside, below is a non-exhaustive, non-academic, discussed-over-coffee, list of strengths and weaknesses in a short list of mediums.

Internet video is best kept short and sharp

  1. Easy to record and upload. Sometimes too easy. See (2).
  2. Weak content and production are obvious.
  3. Easy to find, download and watch, if your audience have broadband connections and can find your content.
  4. File sizes can be a drag.
  5. Requires full audience attention. Most of us don’t watch videos while driving.
  6. Can work for big screens or small. Think before you leap.
  7. Potentially engaging, human, intimate, but too often wooden and inauthentic, in spite of the potential.
  8. Relatively inexpensive to produce, even if you decide to buy cameras and chromakey screens, etc.
  9. Relatively visual. You can creatively incorporate demonstrations, locations, props and other aids.
  10. If loaded to a public site (e.g. YouTube), your video could be on the Internet for a long time.
  11. Linear, chronological. Great for stories and gags and conversations, but offers limited audience selection and control.
  12. Prone to rambles and inefficiency, the hallmarks of natural speech. Proper planning and preparation can alleviate these problems, without harming effectiveness.
  13. The illusion of spontaneity.

Summary: Video is mostly one way, but great for short lists, updates, entertaining and conveying personality.

Podcasts offer portability, repeatability and the opportunity to educate

I have downloaded more than 500 podcasts onto my MacBook Air and iPod—but only listen to a couple of podcasters regularly.

  1. Podcasts are easy to get repeat access and to download.
  2. Portable. Audiences can download podcasts to all kinds of devices, including smart phones, and listen while walking, riding, commuting, gardening, etc. (Hopefully not while performing brain surgery.)
  3. File sizes are usually much smaller than video.
  4. Easy and inexpensive to make.
  5. Unless it’s instrumental, you’re reliant on words and how you say them. There can be a lot in that. Requires a broader communication repertoire than most people have, to pull it off well and consistently.
  6. Prone to rambles and inefficiency.
  7. Linear, chronological.
  8. Searching through is not as efficient as with text, but the fast-forward and rewind tools are getting better all the time.
  9. Great for conversations, interviews.

Summary: Podcasts are also mostly one way, but great for updates, lectures, seminars, lessons, conversations, interviews—and telling stories.

See you next post.

Keep well,

James E

Are you a proactive accountant?

Recently I was talking to a bunch of accountants who either ran or were employed by small firms. I get a kick out of meeting accountants and having the opportunity to get to know them and better understand their views on serving clients both big & small.

One of the ice breakers I use when speaking to small groups is to go around the room and ask for people to share three things. 1. Their name, 2. How long they have been in professional practice, and 3. One unusual feature of their practice.

The first two questions usually bring standard answers. However, the third question generates some very interesting and often insightful responses. One chap I asked had the following answer to question 3. “James … We call our client filing areas by first names – Trevor, Brendan, Florence etc… Each name represents a different type of filing area dependent on points in the client work flow.” I asked this chap why the names. He replied, “It’s much easier to say to each other ‘take this file to Trevor’, ‘Brendan has that file’ and so on. Of course they just have to make sure they don’t employ anyone in the future with the sane first names!

The insights of the above response I came away with was that this firm had a sense of fun, friendliness and didn’t take themselves too seriously. That being said – I got the impression that they are very professional in the work they do.

On the other end of the spectrum there was a gentlemen who in response to question 3 said the following, “I never phone a client. They always phone me for my help” With complete respect to the chap who made this statement, I think the sentiment behind it is rather poor and self-serving. One of the big themes of this blog, the book I authored & the speaking I’ve done over the last year is that clients want their accountants to be proactive. Unfortunately the above chap doesn’t fit into what most clients in the market want.

I hope you fall into the proactive group rather than the other bunch.

See you next post,

James E

Are you an accountant that can spot an opportunity?

Recently I was chatting with a CFO on the phone. To protect the innocent lets call him Anthony as in Anthony Hopkins.

Anthony 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.

Anthony’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. Anthony, 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. Anthony 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, Anthony 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, Anthony 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 Anthony 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 Anthony’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) wern’t proactive enough to at least ask the question “Why the loss was occurring year after year?” As Anthony 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

If you’re in a disagreement – try this!

If you have read through this blog a few times you’ll know that I’ve been a big fan of the work of David Maister.

Here is a piece David originally posted in June 2006 which was titled “Maister’s Exaggeration Ploy” It is definitely worth a read!

I have noticed something very strange about engaging in discussions (and even disagreements) with people.

The more you disagree with them, taking the other side in an argument, the more vehemently they push their original point of view. However, if you don’t disagree, but restate their point in an exaggerated form, they often back down, or at least tone down their original statement.

This works so well, I’m thinking of copyrighting the idea and calling it “Maister’s Exaggeration Ploy.”

(I know, I know, there’s little new in this world and someone else probably thought of it before me, but I don’t think I stole this from anyone. And if I did, I can’t remember from whom.)

To see how my principle works, imagine a family member, say, a brother, who is upset at how he has been treated by a cousin. Your brother says: “I’m really upset with Jimmy. He had no right to speak to me that way!”

Because you want you brother to calm down and get over it, you might say: “Don’t let it bother you. Perhaps he really didn’t mean to be unkind.”

As valid as your point may be, you can bet your remarks will only serve to annoy your brother. After all, you appear to be defending cousin Jimmy by downplaying his intentions. This will set your brother off on another tirade, and also, probably, cause him to get annoyed with you, too.

But what if you had said: “You’re right! Jimmy’s a louse. He always has been! I think we should have nothing to do with him, ever again! Let’s leave him off the invitation list for all family gatherings from now on!”

Nothing with people is a certainty, but I would bet that your brother’s next remarks will be something like: “Well, maybe it wasn’t that bad. I’m upset, but there’s no point over-reacting.” You have calmed him down by agreeing with him and exaggerating his own point!

The same principle of exaggeration applies in the workplace. If your boss (or client) berates you because you were late in delivering something, don’t fight back, saying it was his or her fault (especially if it was!)

Instead, say: “I realize what a problem this has created for you. I’m really sorry that I caused you such turmoil. Can you help me figure out a way to prevent this in the future?” The boss (or client) will, with high probability, calm down and you’ll survive! Or at least the odds will be more in your favor!

Try my approach out. Let me know if it works for you!

See you next post.

James E

Does discounting help the accounting profession?

Recently I was in a coffee meeting with a friend of mine who is a partner in a top 10 firm chatting about the accounting market.  Roger (not his real name) was relaying to me an experience his firm had in a tender with a prospective client late last year. The tender was for a specific project around the need for the client organisation to restructure their tax affairs and as such it had some complexity – certainly not a straightforward compliance project.

Three accounting firms were involved in the tender: 2 “Big 4” firms and my friends top 10 firm.  My friend’s firm put their bid in at say $90k and one of the big 4 firms pitched at $140k. Now I have changed these price points to protect the innocent, but the relativities are the same. The other big 4 firm, for apparently the same scope, put their bid in at $40k. My initial reaction when my friend shared this with me was how incredibly foolish and desperate.  Unless there are specific strategic reasons to go in at such a low level or there is an excess of staff capacity that is not being utilised and needs to be “got working” why pitch at such a low price which is clearly (at least in the short term) unprofitable and unsustainable?

In the days since the coffee chat my thinking has turned to the much more fundamental issue that the above big 4 firm is not only doing themselves a disservice but also the entire accounting profession. By default, rather than by design, the firm, has in the mind of the market, devalued what they do for clients. This is incredibly dangerous since it has introduced the unsophisticated device of price as the key differentiator. Unchecked, widespread discounting will simply commoditise the profession and set in train a chain of events that will reduce the availability of high quality and tailored advice to only those who can afford to pay the top end firms.

For the sake of your own firm’s viability and the health/strength of the overall profession please think carefully before you discount!

All my best,

James