I don’t know what I don’t know

A while ago received a message via Facebook from the son of a friend of mine who had seen me driving back home and noticed that one of the brake lights were “out” on my car. What a nice young man!

So being the responsible & mature husband, father and professional (yes you guessed right – my wife doesn’t read my blogs 🙂 ) I called my local mechanic (I’ve known Mike for years) first thing this morning and asked if he could replace the broken brake light bulb sometime today. Being the trooper that he is Mike told me to bring the car down any time that suited me and he would do it right away. What wonderful customer service!

I dropped off the car at Mike’s workshop and told him I’d be back in a couple of hours – he offered to do it there and then but I didn’t think that was fair. A couple of hours later I walked into his office and paid the bill and asked him how business was going. Mike has been in business for more than 20 years and made a most telling statement to me about his accountant in reply to a something I had learned the other day about how the Australian Tax Office treats business credit card purchases which he found useful & interesting.

This is what Mike said:

I really hate that. Why did I have to learn from a customer about how the ATO treats those things and not be told by my own accountant? You know what he’ll say if I raise it with him? Mike – you didn’t ask me about it. How can I ask him about it? I don’t know what I don’t know!

What a most intriguing statement – “I don’t know what I don’t know”

Is it fair for accountants to read the mind of their clients and tell them everything about everything? I’m not sure about this.

There are so many areas in which accountants in Australia have to keep up to date with. They include areas as diverse as:

  • Tax and superannuation
  • Small business concessions
  • ATO rulings
  • CGT
  • FBT
  • GST
  • Payroll tax
  • Stamp duty

The list goes on and on.

From the clients point of view does he/she choose an accountant who is a member of the Institute of Chartered Accountants or what about CPA Australia or perhaps the Institute of Public Accountants? A lot of questions.

See you next post,

James

Increase your fees by not selling!

Last week I was reading a great article on the Forbes website written by Mike Myatt. It doesn’t speak specifically about professional services but it presents a strong case for not selling when wanting to build your business revenue. Confused? Read on … The full article can be found at http://www.forbes.com/sites/mikemyatt/2012/05/01/to-increase-revenue-stop-selling/

Creating or expanding business relationships is not about selling – it’s about establishing trust, rapport, and value creation without selling. Call me crazy, but I don’t want to talk to someone who wants to manage my account, develop my business, or engineer my sale. I want to communicate with someone who desires to fulfill my needs or solve my problems. Any organization that still has “sales” titles on their org charts and business cards is living in another time and place, while attempting to do business in a world that’s already passed them by.

Engage me, communicate with me, add value to my business, solve my problems, create opportunity for me, educate me, inform me, but don’t try and sell me – it won’t work. An attempt to sell me insults my intelligence and wastes my time. Think about it; do you like to be sold? News flash – nobody does. Now ask yourself this question, do you like to be helped? Most reasonable people do. The difference between the two positions while subtle, is very meaningful.

The traditional practice of sales as a business discipline has become at best ineffective, and in many cases flat out obsolete. You see, good business practices are not static. Stale methodologies and disciplines simply die a slow and very painful death, and it is my contention the overwhelming majority of sales processes I see in today’s marketplace are The problem with many sales organizations is they still operate with the same principles and techniques they were using in the 60′s, 70’s and 80’s. While the technology supporting sales process have clearly evolved, the traditional sales strategies proffered by sales gurus 20 or 30 years ago have not kept pace with market needs. They are not nearly as effective as they once were, and as I’ve alluded to, in most cases they are obsolete.

Trust me when I tell you that your existing and potential clients have heard it all before. They can see the worn-out, old school closes coming a mile away. They can sniff antiquated selling strategies, and will immediately tune out on presentations not deemed relevant. If your sales force is still FAB-selling, spin-selling, soft-selling or using any number of outdated, one size fits all selling methodologies, your sales are suffering whether you realize it or not. If you want to create revenue, increase customer satisfaction, and drive brand equity, stop selling and start adding value.

Lest you think I’ve lost my mind, I want to be clear that I’m not advocating taking your eye off the revenue creation ball. Rather what I’m recommending will help you generate more revenue, with greater velocity by simply doing the right thing in putting your customer’s needs first.

I hear a lot of noise about the tough economy, and revenue being down for many companies. I hear complaint upon complaint that companies just don’t have money to spend, and that nobody is buying. If you’re experiencing this type of reaction from your customer, it’s not because they don’t have money to spend, it’s because you’re selling and not adding value. It’s because you’re talking and not listening. It’s because you don’t get it…

It’s not about you, your company, your products or your services. It’s about meeting customer needs and adding value. When you start paying more attention to your customer needs than your revenue needs, you’ll find you no longer have a revenue problem to complain about.

Not much to add here folks!

What do you think?

All my best,

James

 

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

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