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March 2012

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XCM Solutions, Inc. (a robust workflow product we use in our firm) conducted a research project last year to identify the differentiating factors between high and low performing firms.  Some of the findings are amazing and support the things THRIVEal firms have been doing all along.  We’ll check them out over the next 7 posts.  Click the image to the left to download a copy of the full report.

 

Habit #6: High Performers Invest in their People Through Education and Training

High performing firms don’t implement new technologies and then leave their people on their own.  They see the future importance that training brings.  Especially when new technologies are implemented, training is what will make the use of the technology work more effectively for the firm and their clients.

Training is thorough and continuous for high performing firms.  That training is done on a timely basis attempting to avoid the pressure to implement quickly.

How do you implement technology?

Category:
Business
Comments:
0

As I see it, everything is up for disruption in our profession. Everything.  Our precious time sheets, our practice management software, our paper, our ‘lip service’ to customer service and our hierarchical management structures.  In my eyes, everything is ripe to be blown up.  So let’s talk about the underlying foundation of our firms: our legal structure.

In my state (South Carolina), there are specific state statutes that a ‘professional’ corporation can organize under.  I assume these are similar to many other states.  These statutes state what a ‘professional’ corporation can and can not do.  It also says who can and can not own shares in this corporation.  As stated in our professional statutes:

SECTION 33-19-200. Issuance of shares.

(a) A professional corporation may issue shares, fractional shares, and rights or options to purchase shares only to:

 individuals who are authorized by law in this or another state to render a professional service described in the corporation’s articles of incorporation.

 

I believe this is for the purpose of protecting the great citizens of our state.  Apparently, since you can only issue shares to ‘individuals who are authorized by law in this or another state to render a professional service,’ we are going to operate at a higher level of ethical behavior, all the while helping our clients feel warm and fuzzy.  That is BS!

The ‘protectionism’ that has built up around professional corporations used to be a good thing.  But now, it is holding our profession back from innovating and changing things.  I believe the team working in my firm is very important.  They form the culture, support our customers and drive the value to our customers.  When a legislative statute begins restricting whom I may put in leadership or ownership positions, I feel restricted, not protected.  The worst part is I feel like our customers have ultimately become the unnecessary casualties of these protections.  Let me explain.

It is well known that our profession is utterly and totally conservative.  In the past, this may have been necessary to ensure CPAs ‘do the right thing.’  I’m not sure why this was necessary, but let’s assume it was necessary.  Though these protections were in place, they still could not really ensure our clients were protected.  There are CPAs that still shafted their clients for their own gain (remember Arthur Andersen and Enron?).  So our customers are not really as protected as we want to believe they are.  They are not as safe as they think they are.  We can still stick it to our clients if we want to (as long as we have the right work papers, or back-dated signed forms on hand).

It seems it would be better for our customers if we were positioned as aCompany, not a Firm

In this, I mean a Company to be an entity that totally answers to their customers first (and regulators second).  The CPA Company could be solely focused on bringing new value to their customers.  On the other hand, a Firm is an entity solely focused on filling workpapers out, obeying rules so they don’t get in trouble and answering to regulatory bodies first.  The clients are a distant second in a Firm.  At least, that is what I believe.  You can disagree if you want.  But I believe our ‘firms’ prove what I’m saying.  Younger staff in our firms know that we don’t really focus on our clients.  We go to crappy CPE just to meet the regulatory requirements of our licenses, limit what the staff can say on Facebook because we are scared we’ll get in trouble and dread the Peer Review.  And though Peer Review is a good idea, I feel like Client Review is a better tool to make me do the right thing.

 

But I don’t want to be such a downer.  The future of our great profession is brighter than it’s ever been!

How can we change?  Let’s blow some stuff up:

1.  Let’s reorganize our Firms to become Companies under general corporate statutes, not professional statutes.  My firm will become Blumer CPAs, Inc.  I’ll be the CEO and we’ll hire people (licensed or not) that care about our clients and want a share in the profit that we create.

2.  Let’s add a little risk to our companies.  Adding risk means we’ll be trying new things… something our customers desperately want us to do.  We’ll try new services, sacrifice in new ways for our customers and give new optional pricing models to our customers.

3.  Let’s cancel our Professional Liability insurance.  What will this do?  You will totally care about who you let work in your firm and who you serve in your firm if you have no insurance ‘protecting’ you.  Hopefully, you would become crazed about how and whom you serve (which is the point).  Take away ‘perceived’ means of protection and safety (because policies don’t really protect you anyway), and start delivering uncompromising value to the people who decide if you will have a job tomorrow or not (a.k.a., your customers). No, I probably won’t actually do this because my wife won’t let me.

4.  Let’s focus on positioning and marketing to the communities that are developing all around us.  Social media is not bad, and all of your work should eventually come from online referrals.  Market to the community.  That is where the world is congregating.  Let’s position ourselves there.

5.  Let’s slow down our processes.  Take your niche to scary deep levels, take only a few clients a month, ask everyone why they want to become a client and stop serving ‘everyone.’  I’ve tried saying ‘no new customers’ for a few months at a time just to see what would happen.  What does it do to our team, our growth and the perception from potential new customers?  I learned a lot about my resolve for growth and why my firm existed when I did that.

6.  Let’s outsource those services that are not based upon knowledge, like preparing tax returns, payroll tax returns and ‘write-up’ work.  Ask yourself, ‘would my client pay me for this service if they didn’t have to?’  If not, then get it out of your new CPA company.  Be radically addicted to selling knowledge, not transactions.  Eventually, the customer will take it away from you anyway or take it to another CPA company that knows they sell knowledge.

7.  Let’s stop billing our services in 6 minute increments and look at the bigger picture that we sell knowledge, and that our customers want to buy knowledge.  They pay you to do a tax return only because they have to.  That is a sucky positioning statement, and you better fix it before the customers find out!

I have blown so many things up in my firm it’s not funny.  It’s been painful, but the knowledge gained from my attempts to manage and implement risk for higher profits has made us better.  We serve better, are better positioned to serve only those we want to serve and make more money.

Our future is bright, but I feel we must begin blowing stuff up, look through the dust and mine for the good stuff that remains.  What will be left after you blow up the old stuff?  You may find some diamonds.

As I see it, everything is up for disruption in our profession. Everything.  Our precious time sheets, our practice management software, our paper, our ‘lip service’ to customer service and our hierarchical management structures.  In my eyes, everything is ripe to be blown up.  So let’s talk about the underlying foundation of our firms: our legal structure.

In my state (South Carolina), there are specific state statutes that a ‘professional’ corporation can organize under.  I assume these are similar to many other states.  These statutes state what a ‘professional’ corporation can and can not do.  It also says who can and can not own shares in this corporation.  As stated in our professional statutes:

SECTION 33-19-200. Issuance of shares.

(a) A professional corporation may issue shares, fractional shares, and rights or options to purchase shares only to:

 individuals who are authorized by law in this or another state to render a professional service described in the corporation’s articles of incorporation.

 

I believe this is for the purpose of protecting the great citizens of our state.  Apparently, since you can only issue shares to ‘individuals who are authorized by law in this or another state to render a professional service,’ we are going to operate at a higher level of ethical behavior, all the while helping our clients feel warm and fuzzy.  That is BS!

The ‘protectionism’ that has built up around professional corporations used to be a good thing.  But now, it is holding our profession back from innovating and changing things.  I believe the team working in my firm is very important.  They form the culture, support our customers and drive the value to our customers.  When a legislative statute begins restricting whom I may put in leadership or ownership positions, I feel restricted, not protected.  The worst part is I feel like our customers have ultimately become the unnecessary casualties of these protections.  Let me explain.

It is well known that our profession is utterly and totally conservative.  In the past, this may have been necessary to ensure CPAs ‘do the right thing.’  I’m not sure why this was necessary, but let’s assume it was necessary.  Though these protections were in place, they still could not really ensure our clients were protected.  There are CPAs that still shafted their clients for their own gain (remember Arthur Andersen and Enron?).  So our customers are not really as protected as we want to believe they are.  They are not as safe as they think they are.  We can still stick it to our clients if we want to (as long as we have the right work papers, or back-dated signed forms on hand).

It seems it would be better for our customers if we were positioned as aCompany, not a Firm

In this, I mean a Company to be an entity that totally answers to their customers first (and regulators second).  The CPA Company could be solely focused on bringing new value to their customers.  On the other hand, a Firm is an entity solely focused on filling workpapers out, obeying rules so they don’t get in trouble and answering to regulatory bodies first.  The clients are a distant second in a Firm.  At least, that is what I believe.  You can disagree if you want.  But I believe our ‘firms’ prove what I’m saying.  Younger staff in our firms know that we don’t really focus on our clients.  We go to crappy CPE just to meet the regulatory requirements of our licenses, limit what the staff can say on Facebook because we are scared we’ll get in trouble and dread the Peer Review.  And though Peer Review is a good idea, I feel like Client Review is a better tool to make me do the right thing.

 

But I don’t want to be such a downer.  The future of our great profession is brighter than it’s ever been!

How can we change?  Let’s blow some stuff up:

1.  Let’s reorganize our Firms to become Companies under general corporate statutes, not professional statutes.  My firm will become Blumer CPAs, Inc.  I’ll be the CEO and we’ll hire people (licensed or not) that care about our clients and want a share in the profit that we create.

2.  Let’s add a little risk to our companies.  Adding risk means we’ll be trying new things… something our customers desperately want us to do.  We’ll try new services, sacrifice in new ways for our customers and give new optional pricing models to our customers.

3.  Let’s cancel our Professional Liability insurance.  What will this do?  You will totally care about who you let work in your firm and who you serve in your firm if you have no insurance ‘protecting’ you.  Hopefully, you would become crazed about how and whom you serve (which is the point).  Take away ‘perceived’ means of protection and safety (because policies don’t really protect you anyway), and start delivering uncompromising value to the people who decide if you will have a job tomorrow or not (a.k.a., your customers). No, I probably won’t actually do this because my wife won’t let me.

4.  Let’s focus on positioning and marketing to the communities that are developing all around us.  Social media is not bad, and all of your work should eventually come from online referrals.  Market to the community.  That is where the world is congregating.  Let’s position ourselves there.

5.  Let’s slow down our processes.  Take your niche to scary deep levels, take only a few clients a month, ask everyone why they want to become a client and stop serving ‘everyone.’  I’ve tried saying ‘no new customers’ for a few months at a time just to see what would happen.  What does it do to our team, our growth and the perception from potential new customers?  I learned a lot about my resolve for growth and why my firm existed when I did that.

6.  Let’s outsource those services that are not based upon knowledge, like preparing tax returns, payroll tax returns and ‘write-up’ work.  Ask yourself, ‘would my client pay me for this service if they didn’t have to?’  If not, then get it out of your new CPA company.  Be radically addicted to selling knowledge, not transactions.  Eventually, the customer will take it away from you anyway or take it to another CPA company that knows they sell knowledge.

7.  Let’s stop billing our services in 6 minute increments and look at the bigger picture that we sell knowledge, and that our customers want to buy knowledge.  They pay you to do a tax return only because they have to.  That is a sucky positioning statement, and you better fix it before the customers find out!

I have blown so many things up in my firm it’s not funny.  It’s been painful, but the knowledge gained from my attempts to manage and implement risk for higher profits has made us better.  We serve better, are better positioned to serve only those we want to serve and make more money.

Our future is bright, but I feel we must begin blowing stuff up, look through the dust and mine for the good stuff that remains.  What will be left after you blow up the old stuff?  You may find some diamonds.

XCM Solutions, Inc. (a robust workflow product we use in our firm) conducted a research project last year to identify the differentiating factors between high and low performing firms.  Some of the findings are amazing and support the things THRIVEal firms have been doing all along.  We’ll check them out over the next 7 posts.  Click the image to the left to download a copy of the full report.

 

Habit #5: High Performers Invest Wisely in the Best Solutions for Each Function

High performing firms invest in technology solutions that are best for each particular task.  High performers seek out the best technology for their solutions and choose only best-of-breed.  They don’t settle, but make the commitment to seek out the best solutions for each important function in their firm.

Of note, truly high performing firms don’t simply settle for a single vendor strategy in their search for the right technology, but expect collaborative products to be built allowing them the best choice among products that integrate with one another.

Do you seek diligently for the right product or settle for what the first vendor salesperson peddles you?

Category:
Business
Comments:
0

My youngest child Betsie is one of those loud-at-home-but-very-shy-anywhere-else kids. It takes an enormous amount of encouragement to get her to talk to adults that ask her about school or how old she is or what she wants for Christmas. I once offered her money if she ordered her own food at a restaurant. (Bingo! Encouragement that works!) I expect Betsie to grow in her social skills as she gets older, and I have already seen growth in this area, and yet I expect she will always be a little quiet with new people.

A few months ago, I came across an article that a friend shared on Facebook about introverts. I was fascinated because I felt like I was reading an article about myself and Betsie. (And my oldest child Rachel too) I’m not rude, but small talk can be kind of exhausting if it’s not going anywhere. I like to be alone, but I also love to spend time with people in small groups. I am not a thrill seeker or the life of the party, but I enjoy meaningful relationships and conversations. Introverts love to talk. We just talk a lot to a few special people instead of to everyone we run into at the grocery store.

Read more

Category:
Networking, Social Media
Comments:
5

XCM Solutions, Inc. (a robust workflow product we use in our firm) conducted a research project last year to identify the differentiating factors between high and low performing firms.  Some of the findings are amazing and support the things THRIVEal firms have been doing all along.  We’ll check them out over the next 7 posts.  Click the image to the left to download a copy of the full report.

 

Habit #4: High Performers Understand Increased Productivity is a By-Product of Empowering People

In this habit, its all about being paperless and efficient.  Technology makes people work better and smarter, not only replace them.  Workflow systems are a part of a smart firm and empower the team in the firm to work in smarter ways.

High performing firms see their abilities to go paperless as mission critical, and urged other firms to simply “just do it.”  It is now a must for empowering the growth of your firm.

Do you see technology as a way to empower your people?

Category:
Business
Comments:
0