Don’t look up at the mountain

Hey everyone. Sorry about not posting on Wednesday. I have lots of balls in the air at the moment with clients & various projects and simply ran out of time. Again my apologies.

In the last post (on Monday) I was sharing my thoughts regarding a presentation I recently given by Nick Farr-Jones the great ex-captain of the Australian Rugby team.

I ended the post with the words “The story that Nick shared that day, wasn’t about God but it was about the power & energy that comes from focus. The story involves a mountain & a man named Edmund. Nick had the privilege to have a question answered by this great man first hand.”

A few years back Nick was attending a Rugby Test match in New Zealand and just happened to meet Sir Edmund Hillary. He and Sir Edmund were invited to the match by the same corporate sponsor and shared seats in the same box at the game. After the usual introductions and small talk, Nick asked Sir Edmund if he would mind him asking a question about climbing Mount Everest. Sir Edmund, whom must have been asked tens of thousands of times about his expedition, graciously replied, “Of course not young man”.

Nick paused and then asked the first man who had ever conquered Everest the simple question, “Sir Edmund, when you were climbing the mountain did you ever look up at the peak and get discouraged or fearful”

“Honestly Nick”, Sir Edmund replied, “I never looked up at the mountain. All I did was to focus on the next step – concentrating on taking one step after the other. If I did look up at the summit I would most certainly have been discouraged and scared of the enormous obstacle waiting for me!”

It may be a long bow to draw but often in business we look up at the obstacles in front of us be they difficult clients who aren’t paying, challenges with the ATO, IRS or other government departments, demanding staff or rising costs of operating business and get discouraged, fearful or even depressed.

Accountants working in public practice can certainly fall into the trap of worrying about the myriad of things coming up rather than focusing on doing the things that are most important today.

Hope the above helps not just in your accounting practice but in your wider life 🙂

See you next time.

All my best,

James E

One way you can grow your firm …

The Accounting profession, is no different from other industries when it comes to rationalisation. In Australia and beyond there has been a flurry of accounting firms leaving networks & joining others, firms buying/merging with other firms and groups of people leaving larger firms to set up their own shops. Mergers & acquisitions definitely appear to be the flavour of the month.

A little while ago I found a great article on inc.com written by Karl Stark & Bill Stewart. see http://www.inc.com/karl-and-bill/when-strategic-acquisition-makes-sense.html.

Although it doesn’t specifically address activity in the accounting sector its core message is pertinent for all accounting firms wanting to expand via merger and/or acquisition.

Our business is probably similar to your business, in that our primary source of growth lies in the people we hire. We need to find quality people, build a quality team, and create a culture for them to succeed. If they succeed, then we succeed.

We have high standards for our team, in terms of skill set and attitude. Over the past year, however, we’ve found that we are finding fewer people who meet our standards. It’s been tougher to find highly-skilled, strategically-minded people, and when we do find someone, it’s harder to convince them to make a career move.

This leads us to consider an acquisition of a small firm. Although we don’t need more equipment, new technologies, or additional locations–all legitimate reasons to buy a company–we do need to grow the size and quality of our team. And we may be crazy enough to think that buying another strategic advisory firm is the best way to achieve that goal.

So we’ve found ourselves faced with the same due diligence we would advise our clients and portfolio companies to pursue when considering an acquisition. Specifically, buying another company makes sense if:

1) It results in the acquisition of a strategic asset or capability that is too costly or too difficult to build internally

2) It will enhance value growth beyond what the core business is able to deliver on its own

3) It can be acquired at a fair price

In our case, an acquisition would not necessarily be a slam-dunk according to those criteria, but it would have other attractive characteristics:

We would acquire a quality team of individuals at all levels (which we need) who are already battle-tested
These individuals would bring with them a new set of relationships, which would give us the opportunity to bring our capabilities to more clients and investors
They would also bring new capabilities and new ways of thinking, which could help our business innovate and grow

However, we also understand the potentially significant downsides:

Some, or even all, of the key talent might decide to leave after the acquisition
We would likely pay a premium over the cost of hiring individuals directly
We may find (after the fact) that some of the new team members don’t fit well into our culture
The deal process may be a significant distraction to the continued growth of our business

Given these pros and cons, not any acquisition will do. We need to find the perfect fit, and we will need to invest significant time and effort to do so. In fact, there is a distinct possibility that we won’t find a single organization that meets our needs.

But we’ll keep looking, because the prospect of finding a company that would have a dramatic impact on our growth going forward is too important to ignore.

See you next post,

James E

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

We now move on to the 3rd and final installment of what makes a great accounting firm. Of course there are many, many factors which contribute to the greatness of an accounting firm and the people within. The 3 I’ve chosen simply appeal to me – that’s all.

3. Going the extra mile.

I’ve heard many stories throughout the years of business clients telling me about outstanding experiences with advisors. In the case of accountants, the common thread of these experiences seems to be the tendency of the accountant to more often than not leave something on the table. This means that the accountant always does that little bit extra and goes the additional mile when providing a service. It might be some extra service you don’t charge for or some market news you heard that your client may not be aware of.

A good example of that little bit extra is a partner friend of mine traveling to the store opening of one his clients at his own expense. He wasn’t invited or expected to be there – he just turned up. The client saw him in the crowd and just smiled. My friend had traveled from Brisbane to Melbourne to go and show his support for the thirty minute launch. A big deal? Perhaps not – but it meant a lot to my friend’s client.

Incidentally, it might interest you to know that this particular client is a member of the Australian BRW 200 rich list (he is worth about $400m +) and has used my friend’s services for many years. This client has been so impressed by my friends attitude that he has recently asked my friend (and his staff) to personally mentor and coach his three children (aged in their twenties) in the ways of business, finance and personal wealth management. Not a bad gig.

Simple rule: Leave something on the table = the table will get bigger!

See you next post.

James E

Are all accounting firms created equal? (2 of 3)

Following on from our last post, here is the 2nd feature of great accounting firms.

2. Asking questions and listening.

Great accounting firms seem to have a higher proportion of partners and staff who ask good questions and really listen to the responses given. You would have read in my posts before the statement – if you want a better answer, then ask a better question then listen to what the client or prospective client is saying.

Here is the true story of a friend of mine and the question he asked and how it changed the way he sold his services in the future.

As an adviser to the SME market, I often tell others about an event that occurred with a potential new client back in 2008. It was a busy time of the year, and I had been referred a potential client from another professional to assist with a transaction. Needless to say, I had a busy few days leading up to meeting with the potential client and was unable to do my usually pitch approach.

When meeting a potential new client for the first time, I often do research about them (where possible) and the industry that they service to get a better understanding of the client and the market that they trade in before I actually meet with them. I would do this to assist me in identifying potential talking points. Unfortunately, or fortunately as it turned out, I didn’t have the time to do the usual preparation and was actually 10 minutes late to our meeting. I was so unprepared that the first thing I said after introducing myself was to say, “How can I help you?”

It wasn’t until the potential client spent the next hour telling me about their business that I realised how important those words were to them, and that they were actually looking for an adviser who would listen to their needs fi rst and then see where (if at all) they could add value to their business. I must admit that this changed the way I sold my services, from identifying what I could do (talking points), to actually seeing if there was a need for my services in the first place (listening points). This ensured whatever services I sold were valued. As an adviser I keep reminding existing clients that I need to know how I can help them before I can actually help them.

Tune into the next post to read the final installment in what makes an accounting firm great!

All my best,

James E.

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

Accounting Firms – are all created equal? (part 3 of 3)

We now move on to the 3rd and final installment of what makes a great accounting firm. Of course there are many, many factors which contribute to the greatness of an accounting firm and the people within. The 3 I’ve chosen simply appeal to me – that’s all.

3. Going the extra mile.

I’ve heard many stories throughout the years of business clients telling me about outstanding experiences with advisors. In the case of accountants, the common thread of these experiences seems to be the tendency of the accountant to more often than not leave something on the table. This means that the accountant always does that little bit extra and goes the additional mile when providing a service. It might be some extra service you don’t charge for or some market news you heard that your client may not be aware of.

A good example of that little bit extra is a partner friend of mine traveling to the store opening of one his clients at his own expense. He wasn’t invited or expected to be there – he just turned up. The client saw him in the crowd and just smiled. My friend had traveled from Brisbane to Melbourne to go and show his support for the thirty minute launch. A big deal? Perhaps not – but it meant a lot to my friend’s client.

Incidentally, it might interest you to know that this particular client is a member of the Australian BRW 200 rich list (he is worth about $400m +) and has used my friend’s services for many years. This client has been so impressed by my friends attitude that he has recently asked my friend (and his staff) to personally mentor and coach his three children (aged in their twenties) in the ways of business, finance and personal wealth management. Not a bad gig.

Simple rule: Leave something on the table = the table will get bigger!

See you next post.

James E

Accounting Firms – are all created equal? (part 2 of 3)

Following on from our last post, here is the 2nd feature of great accounting firms.

2. Asking questions and listening.

Great accounting firms seem to have a higher proportion of partners and staff who ask good questions and really listen to the responses given. You would have read in my posts before the statement – if you want a better answer, then ask a better question then listen to what the client or prospective client is saying.

Here is the true story of a friend of mine and the question he asked and how it changed the way he sold his services in the future.

As an adviser to the SME market, I often tell others about an event that occurred with a potential new client back in 2008. It was a busy time of the year, and I had been referred a potential client from another professional to assist with a transaction. Needless to say, I had a busy few days leading up to meeting with the potential client and was unable to do my usually pitch approach.
When meeting a potential new client for the fi rst time, I often do research about them (where possible) and the industry that they service to get a better understanding of the client and the market that they trade in before I actually
meet with them. I would do this to assist me in identifying potential talking points.
Unfortunately, or fortunately as it turned out, I didn’t have the time to do the usual preparation and was actually 10 minutes late to our meeting. I was so unprepared that the fi rst thing I said after introducing myself was to say, “How can I help you?”

It wasn’t until the potential client spent the next hour telling me about their business that I realised how important those words were to them, and that they were actually looking for an adviser who would listen to their needs fi rst and then see where (if at all) they could add value to their business. I must admit that this changed the way I sold my services, from identifying what I could do (talking points), to actually seeing if there was a need for my services in the first place (listening points). This ensured whatever services I sold were valued. As an adviser I keep reminding existing clients that I need to know how I can help them before I can actually help them.

Tune into the next post to read the final installment in what makes an accounting firm great!

All my best,

James E.

Accounting Firms – are all created equal? (part 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