Are you an accountant who asks good questions? (3 of 3)

Lets recap.

In the last 2 posts we have discussed the two hallmarks of effective communication – being simplicity and the ability to listen. We now explore the third hallmark – asking good questions.

The third hallmark of effective communication is the ability to ask good questions.

You would have heard me bang many times over the last year about one of my favorite maxims – “If you want a better answer … ask a better question … then listen”

Clients are impressed by accountants and advisors that ask questions they weren’t expecting or that they haven’t been asked before. It shows a preparedness on the part of the questioner that he/she invested time and effort in understanding the clients business and circumstances.

One of the best questions one can ask is “why?” If asked in the right way, the question of why can uncover a treasure trove of insights. There is a body of work that claims that asking “why” at least 3 times in the one meeting or conversation can uncover the root cause or motivation behind any aspect of business activity undertaken by people both internal and external to an organisation.

For example, a business owner may be asked the question, “Why are you in business?” The first response would most likely be “to make money” Further in the conversation, the business owner may then be asked “Why is it important to make money?” The next reply could be something along the lines, “so I can invest in my business” At a later point in the same meeting, the owner can then be asked, “why is investment important to you?” The answer may well be, “my core market is declining and I need to develop offering to new markets.”

By asking “why?” just 3 times the questioner has moved from making money to the business surviving. How interesting. The quality of advice that can be given based on the 3rd response rather than the initial 1st answer is chalk and cheese!

The above of course is an obtuse example but you get the idea!

Keep well,

James E.

Are you an accountant who asks the right questions?

Recently I was chatting with a CFO on the phone. To protect his identity innocent lets call him Robert as in Robert Redford (the slightly older version).

Robert 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.

Robert’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. Robert, 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. Robert 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, Robert 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, Robert 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 Robert 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 Robert’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 Robert 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

Never ask this question (1 of 2)

A few months ago I wrote a post titled “The Worst Question an Accountant Can Ask”. I was in a meeting just the other day with a senior partner from a top 10 accounting firm. To cut a long story short – he (to my great surprise) asked the question an accountant should never ask!

In the book, in between the chapters of the interviews with accounting firm clients are little vignettes called “a view from the other side” which are the responses of accountants I’ve have met and known over the years. They respond to one of four questions I pose them, one of which is, “What is the best question you have ever asked a client or prospect?”

I asked the above question of three senior accountants, two of which were partners and surprisingly two came up with the same answer: they would ask their client or prospect, “What keeps you awake at night?”

At the time I thought it was a fair enough question to ask since it had been used in sales and business development contexts for many, many years. However, in the last few days I read something that completely changed my mind on the whole subject.

During the last week, I read the blog of well-known and respected management journal that blew my socks off. They claim that the worst possible question a professional could possibly ask of a client or prospective client is I fact “What’s keeping you up at night?”

So who are these people that claim that such a simple question that has been asked countless thousands of times all around the world for the last few decades is not only so completely wrong and but can and will simultaneously prevents sales while also destroying customer loyalty?

Well they must know a thing or two since they were published by no less a journal than the Harvard Business Review. Tune into the next post to find out more!

All my best,

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

The worst question an accountant can ask (1 of 2)

If you’ve been a reader of this blog for any length of time then you’ll know that I have sweated over a book that I’ve been working on for several months titled “What do Accounting Clients Really Want?” which was published by Thomson Reuters back in August.

In the book, in between the chapters of the interviews with accounting firm clients are little vignettes called “a view from the other side” which are the responses of accountants I’ve have met and known over the years. They respond to one of four questions I pose them, one of which is, “What is the best question you have ever asked a client or prospect?”

I asked the above question of three senior accountants, two of which were partners and surprisingly two came up with the same answer: they would ask their client or prospect, “What keeps you awake at night?”

At the time I thought it was a fair enough question to ask since it had been used in sales and business development contexts for many, many years. However, in the last few days I read something that completely changed my mind on the whole subject.

During the last week, I read the blog of well-known and respected management journal that blew my socks off. They claim that the worst possible question a professional could possibly ask of a client or prospective client is I fact “What’s keeping you up at night?”

So who are these people that claim that such a simple question that has been asked countless thousands of times all around the world for the last few decades is not only so completely wrong and but can and will simultaneously prevents sales while also destroying customer loyalty?

Well they must know a thing or two since they were published by no less a journal than the Harvard Business Review. Tune into the next post to find out more!

All my best,

James E

Help me help you!

If you have been reading this blog for a while you would have noticed that I’m a fan of David Masiter (see http://davidmaister.com)

David has published a wealth of material on how professional services firms should relate to their clients and prospects. Back in April 2006, David wrote a blog titled “What do you want from me?” Have a read below. I’ve made a few tweeks so it fits better with the theme of my blog. I hope that’s OK!

It’s common that clients will assign work to you badly, and that will cause you problems. How can you do what they want if they don’t tell you clearly what they want? The key is to take responsibility and ask permission to ask questions.

When someone gives you a task to do, say something like ‘I really want to do a great job for you, so can I clarify a few things?’ Most people will say ‘Yes.’ You can then be sure you understand the following details about your assignment –

  1. The context of the assignment – ‘Please could you tell me what you are going to do with this when I get it done, tell me who is it for, and where does it fit with other things going on?’
  2. Deadline – When would you like it, and when is it really due?
  3. Scope – Would you like me to do the thorough job and take a little longer, or the quick and dirty version?
  4. Format – How would you like to see the output of my work presented? What would make your life easier?
  5. Time budget – Roughly how long would you expect this to take (so I can tell whether I’m on track or not?)
  6. Relative priority – What’s the importance of this task relative to the other things you have asked me to do?
  7. Available resources – Is there anything available to help me get the job done? For example, have we done one of these before?
  8. Success criteria – How will the work be judged? Is it more important to be fast, cheap or perfect?
  9. Monitoring and scheduled check points – Can we, please, schedule now a meeting, say, halfway through so I can show you what I’ve got and ensure that I’m on track for your needs?
  10. Understanding – can I just read back to you what you’ve asked me to do, to confirm that I got it down right?
  11. Concerns – before I get started can I just share with you any concerns about getting this done (e.g., other demands on my time) so that I don’t surprise you later?

Yes, your client should be good at assigning work and giving you this information anyway. But the truth is that many people won’t have thought through what they really want from you until you guide them through their ‘either-or’ choices.

If you have not received answers to these questions, you don’t yet know what to do, and the risk of being judged a failure is high!

Don’t rely on your client to give you all this information. Pull it out of him or her!

Some sage advice from one of the real masters.

All my best,

James E

Don’t be an ASS

So far I have interviewed a number of CFOs from a variety of businesses & market segments and have uncovered some interesting common threads.

One thread that has stuck in my mind over the last couple of months is the need for the accounting advisor before they do anything else to understand the business. Here is a quote from Ashley Selwood, CFO, Australian Rugby Union.

… I find at times that external accountants already have some preconceived ideas about what the solution is before they spend the time to actually get to know our business.  We’re a sport and nine out of ten people who walk in the door are either followers of Rugby or at the very least know a bit about Rugby.  When you’re dealing with sport there’s a lot more heart than head involved and sometimes people will walk in the door as a consultant or an accountant and the first thing they’ll do is spend an hour telling you what’s wrong with the Wallabies! Once you get through that, they always seem to have quite fixed ideas of what the solutions are without actually spending the time to get to know our business. In my view this is a fundamental mistake. It not only applies to accountants but all other external professional consultants irrespective of their discipline.

Ashley goes on further to cite some interesting examples of how  accountants have come into the business and not really taken the time and effort to invest in really understanding their business. Too often accountants assume too much without first asking their client questions. As my dad used to say to me when I was growing up (and still does) when you ASSUME you make an ASS of U and ME!

The morale of this post – don’t be an ASS!  (or a donkey for the non-Americans out there)

James E

Asking questions

I’m not an accountant; however, I work with accountants and their clients every day.

Over the course of my professional career, I have come to the conclusion that a lot of accountants (as well as the other advising professions of law, management consultancy, engineering and the like) assume too much about what their clients want. This is not a criticism, simply an observation.  The secret of excellence is the provision of accounting services is to fully understand what the client wants. This understanding is achieved through two simple things: (i) asking better questions and getting better answers and, (ii) listening to what the client is saying (and not saying).

At the moment I’m currently writing a book titled, “What do Accounting Clients Really Want?” which will be published by Thomson Reuters in April next year. The book consists of 25 interviews with people who buy external accounting services for the businesses they either own or manage. Usually the interviewee is the CFO or Finance director. The businesses I’ve targeted for the book are from the SME part of the market, which in my humble view is far more interesting than the big end of town.

For each interview I have stuck to the same core questions with the occasional tangent. These questions are:

1.     What is the most important quality or attribute you look for in an accountant?

2.     How important is technical expertise in an accountant?

3.     Is price and quality a trade off? Does it need to be?

4.     When looking at engaging a new accountant, how important is their firm’s brand to you?

5.     Tell me about a time when you received the best service from an accounting firm. What made it the best?

6.     Tell me about a time when you received terrible service from an accounting firm. What could they have done differently?

7.     If you were to hire a new accountant/accounting firm what are the things you look for?

8.     What is your current experience with your accountant?

9.     What has prompted you in the past, or would prompt you in the future, to change accountants? How often do you change    accountants? What steps do you take to find a new accountant?

10.  Do you prefer time-based billing or a fixed price for service or a retainer arrangement?

11.  What can accountants do to improve their service to you?

12.  Are accountants good listeners? How can accountants be better listeners?

13.  What role does your accountant play in your business? What role would you like them to play?

14.  What’s the smallest change your accountant could make that would have the biggest impact on you?

15.  What do you value most about your accountant? Why?

16.  With the pervasive use of online technologies should accountants give you the option to interact with them via the web?

17.  Do you see areas such as such as tax, accounting, superannuation and audit as a commodity or as a value proposition?

Well that’s enough for now.

See you next time around.

James E