My homeboy Joey Brannon, CPA just wrote an awesome post on his blog recently. He talked about making sure you don’t compete with your clients. I didn’t realize the focus of the post until I read further. In summary, if you are still doing work that your customers can do, then you are basically competing with them (or you will be competing with them soon). His example was a CPA that prepares individual tax returns vs. a client who can prepare their own taxes on Turbo Tax. If you keep trying to grow your practice filling out individual tax returns, then you are basically going to be competing with your clients that can prepare their own tax returns.
Some in the profession of public accounting do not currently see the danger in this because their thinking may be clouded by 30 or 40 years of everything working the way it always has. But that won’t fly anymore. Things do NOT work the way they always have, not will they in the future. Competing with your customers is not only becoming a reality, but something you need to strategically avoid at all costs.
I want to take Joey’s blog post a step further. He warned that customer competition is becoming a reality. I want to push you to the other side and ask you to become strategic in making sure you start moving OUT of the work that is customer-competitive. It’s called being strategic, or intentional. And how do you act strategically or become intentional?
You innovate! Basically, you stop doing work that involves your hands (key punching data, serving people french fries, washing Greg Kyte’s dodgeball uniform, etc.) and start doing work that involves using your head.
That’s right – innovation is the answer to avoiding customer competition. Here are my thoughts laid out textually:
customers start doing the work you do >
so you stop doing what they can now do >
to do that you have to do something different >
to do something different you have to innovate and create new services >
which means you have to stop using your hands and start using your head.
I created a Work Innovation Grid to see what this looks like visually:
The grid compares our Type of Work (X axis) with How We Work (Y axis). The Customer Competitive Work phrase comes from Joey Brannon’s blog. The opposite of that is innovation, more specifically to Innovate Professionally.
Now add some directional arrows on the grid below so you know which way is best to be working towards. If you are becoming more innovative, then you are creating new things that our world has not seen before. If you are ceasing to use your hands and are investing in yourself to sell more of your brain, then you are involved in some kind of outsourcing (think of the word ‘outsourcing’ more broadly. It simply means moving manual work to a more efficient company, technology or business model than you can probably provide inside of your company).
Now we see that we want to be moving towards the upper right-hand corner to become an intentional or strategic (and thus, innovative) company.
Lets look at the quadrants separately. The terms we’ll put in the boxes will be descriptive of the types of company that perform their work in their own particular way.
Quadrant 1: If you are doing work that customers can compete with, and which you mostly use your hands to perform (the current state of the CPA profession), then I describe you as Blindly Resistant to Progress.
Quadrant 2 below shows a company that is adding innovative services to their line up but still performs their work with their hands. The type of work is innovative but the customer still has the capacity to do this work themselves. I call this Short Lived Success as the customer will soon figure out the innovation and do it themselves.
Quadrant 3 shows a more complicated scenario. This is where the company is using their brains to provide service to the customer. This is good because selling your brain can not be easily duplicated by the customer, and thus is a more valuable service to the customer. But in this instance, the service is so specific to the customer that the customer may be the only one that can provide the service well. Maybe someone could help me with this quadrant in the comments. I need a good example. See the image below with quadrant 3 highlighted – I call this Hyper Customer Specific.
Quadrant 4 is where we all want to live! This is where we are growing into Innovative Companies and working with our heads. The customer can’t easily duplicate our work in this area so we are able to price high as we change their lives. In this quadrant, we are being strategic and intentional and it’s fun! I call this quadrant Strategically Changing Lives.
This visual helps underscore the importance of becoming a Strategic Firm. At our current state, our profession is acting blindly. Another word for this is ignorant. We are operating as if nothing has changed and nothing ever will. But anyone with eyes knows that the world is changing very rapidly. This rapid change is creating new jobs that did not exist before, allowing technology to take over many tasks professionals use to do and putting the customer front and center in the determination of what they value. Our world can now demand more… and we must offer more.
We must become Strategic Firms that change lives.