Peak Performance: How the Best Get Better

DFK North American Annual Conference 2015

The Ritz-Carlton, Grand Cayman

Thursday, October 22, 2015

OBJECTIVES

To share with delegates how a culture of Accountability is crucial to becoming a World Class Firm.

To ensure that delegates actively participate and share openly.

To have each delegate leave the meeting with some action items for implementation .

A little about Phil Whitman CPA

Chicken Man

18 years running professional service firms

Started Whitman Business Advisors in 2008

Recently Named 2015 -10 Most Recommended Consultants by Inside Public Accounting

Married to Mia

Three sons, Charlie, Jake and Alex

The Four Pillars of a World Class Firm

Definition of “World-Class”ADJECTIVE

ranked among best in world: ranked among the best or most prominent in the world

Thesaurus Synonyms:

first-rate, first class, superlative, topnotch, outstanding

INDUSTRY ISSUE

Bringing in new clients

Top 5 issue for firms with 21+,11-20, and Sole Practitioners

Developing a Succession Plan

INDUSTRY ISSUE

Top 5 Issue for firms of all sizes

Finding & Retaining Quality Staff

INDUSTRY ISSUE

Top 5 issue for all but sole practitioners

Seasonality/Workload Compression

INDUSTRY ISSUE

Top 5 Issue for firms of all sizes

Partner Accountability/Unity

INDUSTRY ISSUE

Top 5 Issue for firms of 21+ professionals

Changing Regulation

INDUSTRY ISSUE

Top 5 issue for 2-5 professionals & sole practitioners

Retention of current clients

INDUSTRY ISSUE

Surprised? Not a top 5 issue!

Fee Pressure/Pricing of Services

2011 PCPS CPA Firm Top Issues Survey

INDUSTRY ISSUE

Surprised? Not a top 5 issue!

What issues are you hearing from your staff?

What I typically hear from your staff…

•Too many things are not followed through on and there are little or no consequences set forth.

•Bonuses/raises are not tied to performance.

•There is little feedback on performance except once a year at my annual review.

•We don’t always do what we say we are going to do.

•Firm is divided between audit and tax, the teams have poor communication and should mesh better for such a small firm.

•There is too much finger pointing and negativity when an error occurs.

Staff comments continued…•Communication can be improved at all levels of the firm.

•Sometimes the entire staff knows something before the partners decide to talk about it.

•There are instances when people are not direct when they have something that needs to be communicated.

•Firm does a poor job of communicating…partners come across as “bothered” when employees drop in to ask them questions.

•Tasks & goals are not laid out clearly for staff.

•With the exception of this survey, opportunities to talk about the firm were never given. 

Staff comments continued…•I feel the firm would be more motivated and exciting to work for if they had goals and incentives to work towards.

•We use metrics to measure realization and utilization however bonuses or raises are never tied to these.

•I have no idea how raises or bonuses are derived.

•It seems that there is not much differentiation between good performers and bad performers.

•Constructive criticism comes only once a year in my evaluation.

•Career development is weak. We need more training. 

The Iceberg of Ignorance

Partner Awareness

4%

Manager Awareness

9%

Supervisor Awareness

74%Staff

Awareness100%

What issues do you hear from your partners?

What your partners are saying…

What your partners are saying…

What your partners are saying…

What your partners are saying…

Best partner comment I heard…

It is vital that the firm develop a strategic

vision for the firm, align its partners and

staff with the vision and develop an

action plan to implement. Further, we

must monitor and hold individuals

accountable.

The 1st Pillar of a World Class Firm

Exercise

In your own words…definition of trust

TRUST IN LEADERSHIP

A crucial requirement of leadership is the ability to earn the trust of others.

To trust a leader does not mean that one always agrees with him or her.

Trust is the conviction that the leader means what he says and cares.

Managing the Professional Service Firm: David H. Maister

TRUST

Trust Grows

The Trusted Advisor: David H. Maister

TRUST

Trust is both Rational & Emotional

TRUST

Trust is a Two-Way Relationship

TRUST

Trust Entails Risk

TRUST

Trust is Personal

Quote about creating Trust“The leaders who work most effectively… never say "I". And that's not because they have trained themselves not to say "I". They don't think "I". They think "we"; they think "team". They understand their job to be to make the team function. They accept responsibility and don't sidestep it, but "we" gets the credit. This is what creates trust…”

TRUST

The degree of confidence you have that another party can be relied on to fulfill commitments, be fair, be transparent, and not take advantage of your vulnerability.

Robert F. Hurley, The Decision to Trust

 

The Distrust – Trust Continuum

Quote about Distrust

"Our distrust is very expensive."

What happens?

In important matters, when we decide to distrust, a relationship usually ends or continues under duress unless it can be repaired. 

Fortune Magazine

The primary measure used to select its annual list of Fortune 100 Best Companies to Work For is Trust.

How do you measure trust in your firm?

How do you measure trust in your firm?Is there a high degree of trust in the firm?  

Do people in your firm follow-through with what they commit to?

Do people in your organization freely share quality information between each other?

Is the behavior of your managers and leaders predictable and positive?

Is performance feedback a regular and on-going part of your reward and recognition process?

Are gossip and the grapevine the primary way people know what is going on in your organization?

Do people discuss disappointments in an open and responsible way?

Center for Creative Leadership

A world leadership survey indicates that only 30 percent of employees ages 25 to 35 trust the people they work with “a lot,” versus 45 percent for employees ages 36 – 65.

Tips to Building

The 2nd Pillar of a World Class Firm

Communication

COMMUNICATION

Effective Communication

Effective communication is a two-way process - sending the right message, that is also being correctly received and understood by the other person(s).

Different ways we communicate

2 QuestionsIs communication excellent at your firm?   

Do the owners communicate with each other?

Quote about Communication

“The single biggest problem in communication is the illusion that it has taken place.”

Typically when excellent communication takes place it is very easy to be a “one firm” firm!

WHAT KIND OF FIRM IS YOURS?

The 3rd Pillar of a World Class Firm

Alignment of Goals

Goal alignment is critical for business success. It ensures that each person within your organization can see the direction for the business and knows how their job fits in with the “Big Picture”.

Alignment of Goals

To achieve goal alignment at your organization, you must first clearly

communicate strategic business objectives across your entire company

ALIGNMENT OF GOALS

How do you ensure Alignment of Goals in your firm?

Quote about Alignment

“When you are in alignment with the people around you, you are much more likely to travel in the same direction and avoid hidden agendas.”

The 4th Pillar of a World Class Firm

Culture of Trust

Excellent Communications

Alignment of Goals

High Accountability

The Four Pillars of a World Class Firm

DEEP DIVE into…

Culture of Trust

Excellent Communications

Alignment of Goals

High Accountability

The Four Pillars of a World Class Firm

Accountability

One of the most Critical Keys to Peak Performance and Success

Accountability

In your own words…definition of accountability

Some things I’ve heard…

Accountability is an obligation or willingness to accept responsibility

Accountability is nothing more than following through with your commitments and responsibilities

Accountability is simply doing what you know you should do

ACCOUNTABILITY

Roger Connors and Tom Smith

Webster’s definition of accountability: “subject to having to report, explain, or justify; being answerable, responsible.”

“A personal choice to rise above one’s circumstances and demonstrate the ownership necessary for achieving desired results – to see it, own it, solve it, and do it.”

Everybody, Somebody, Anybody & Nobody

This is a little story about four people named Everybody, Somebody, Anybody, and Nobody.

There was an important job to be done and Everybody was sure that Somebody would do it.

Anybody could have done it, but Nobody did it.

Everybody thought that Anybody could do it, but Nobody realized that Everybody wouldn't do it.

It ended up that Everybody blamed Somebody when Nobody did what Anybody could have done

Somebody got angry about that because it was Everybody's job.

What is the impact of greater accountability? Why bother?

Commitment + Accountability =

Greater Accountability =

Increase in Top Line

Increase in Per Partner Net Income

Ability to give larger raises

Ability to hire faster

Ability to fire faster

Ability to …

Who has tried to implement a policy of accountability? What’s worked? What hasn’t?

How Accountable are you?

It Starts at the Top! Managing Partner Accountability

Leadership

Opportunities

Vision/Mission

Partner Productivity

Client Service

Growth – organic/acquisition

- people

– revenues

– net income

How do you measure Accountability ?

Steps & Milestones

A thin line separates failure and success, greatness and mediocrity.

Accountability Continuum

Victim AccountableWhere do you stand?

Blame othersMake excusesWait, and hope things change

AcknowledgeLook in mirrorFind solutions

Above the line…See it !

See It, means acknowledging the problem

The Oz Principle : Getting Results Through Individual and Organizational Accountability By Roger Connors, Tom Smith, and Craig Hickman

 

Above the line…Own it !

Own It is to assume responsibility for the problem and the results

The Oz Principle : Getting Results Through Individual and Organizational Accountability By Roger Connors, Tom Smith, and Craig Hickman

 

Above the line…Solve it !

Solve It means to formulate solutions to remedy the situation

The Oz Principle : Getting Results Through Individual and Organizational Accountability By Roger Connors, Tom Smith, and Craig Hickman

 

Above the line…Do it!

Do It commands the practical application of the solutions identified

 

The Oz Principle : Getting Results Through Individual and Organizational Accountability By Roger Connors, Tom Smith, and Craig Hickman

 

Below the line…

Playing The Blame Game and crippling attitudes such as:

• Wait and See• Confusion• Tell Me What To Do • It's Not My Job • Ignore/Deny• Finger Pointing • Cover Your Tail

The Oz Principle : Getting Results Through Individual and Organizational Accountability By Roger Connors, Tom Smith, and Craig Hickman

 

How do you know when people are not being accountable?What are the behaviors you see?

Why?

What have you been talking about for five years?

CREATING A CULTURE OF ACCOUNTABILITY IS SIMPLE…

S = Set Expectations

M = Measure Progress

P = Provide Feedback - coachingL = Link to Consequences – Carrot v Stick

E = Evaluate Effectiveness & Adjust

I = Invite Commitment

MEASUR

E

REFINE COACH

SIMPLE - ACCOUNTABILITY SUCCESS Model

Individual

Firm

Set

Expectations

GOAL SETTIN

GPERFORMANC

E

rovide FEEDBACK

ACHIEVE

© Whitman Business Advisors LLC

nvite CommitmentI

P

LInk to results

VALUATE

RESULTS

EXERCISEHow many hours/minutes do you spend?

HOW MUCH CAN YOU SQUEEZE INTO A DAY?Exercise 30 minutes

Personal grooming 45 minutes

Time with children 4 hours

Reading newspapers 45 minutes

Pets 50 minutes

Housekeeping/chores 1-2 hours

Work 7-10+ hours

Commuting 1.5 hours

Errands Up to 2 hours

Grocery shopping 20 minutes

Cooking/eating dinner 1 hour

Entertaining 1 hour

Dental care 18 minutes

Sex/Intimacy 50 minutes

General time with spouse 6 hours

Volunteering 30 minutes

Time for you 1 hour

Reading a book 15 minutes

Spiritual development 15 minutes

Sleep 7.5 hours

41.3 hours

I don’t have time for this!!! If you can recapture 10 minutes of wasted time per

hour… Assume a 10 hour day = 100 minutes/day Times 5 days/week = 500 minutes/week Times 48 weeks = 24,000 minutes/year 24,000/60 = 400 hours Assume you earn  $80,000 annually and your total

hours are 2,000; so, you earn  $40/hour. Now that you have 400 extra hours, you only have

to work 1,600 hours; so, your effective hourly rate is  $50/hour ( $80,000/1,600).

A  $10/hour increase over your original rate of  $40/hour is the equivalence of a 25% raise!

What would you do with an extra 400 hours each year?

That’s almost 17 days of time you gain… Family time Exercise Sleep

The choice is yours!

EXERCISE

Set one goal on how you are going to use this extra time I just found you…

If Goals are SO important, why don’t more people set them?

1. They don’t know the importance of goal setting.

2. Most people don’t know how to set goals.

3. Sometimes people don’t set goals because they are afraid of failure.

4. Goals require people to leave their comfort zones.

GOAL SETTING

Start with the end in mind Major goals Mini goals Deadlines

Pad projected completion datesUnder-promise/over-perform

Make it visible Delegate & follow up

GOAL SETTING

SMART GOALSSpecificMeasurableAttainableRelevant & RealisticTimely

Exercise:

Geography

Upgrade Staff

Increase realization

Develop new business

Identify Future Leaders

Succession Planning

Goal/Accountability Setting: Identify one area in your firm that needs attention

EXERCISE ExampleThree things I would do if I had more time…

One year from now I will run the NYC Marathon and complete it in under 3 ½ hours. I will do this by following a regimented training schedule each week.

I will originate $250,000 of new tax work that is represented by at least 6 new clients by 6/30/15. To do this I will meet with one new prospective client every week.

I will hire 3 consultants with CPA firm experience by 12/31/15. I will do this by meeting with 1 COI each week and will ask for referrals of the best and brightest they have worked with.

Framework of Partner Accountability

Partner Accountability Partner to Firm

Profitability

Practice development

Partner to Partner

Good Citizenship

Partner to Client

Client satisfaction

Partner to Staff

Supervision

Training

Coaching

Contribution to success of others

Partner to Family & Self

Partner Accountability

Business Development Client Service Team Development Leadership What are the Challenges What are the Benefits How do we Measure Rewards vs Consequences

Resistance Factors & How to Overcome them

The Ultimate

Action Items

WHAT BY WHEN BY WHO Resources Needed?

Smart Goal Setting

Build Accountability Framework

Roll-out & Communicate

Partner Productivity Plans

Partner 360s

What more can I do?

YOUR PRACTICE MANAGEMENT RESOURCE

Retreat Facilitation

Mergers & Acquisitions

Lead Generation Services

Talent Acquisition

Leadership Development Coaching

Practice Management Consulting

OUR SIX PACK+ of SERVICES for CPA FIRMS

ARE YOU A SIX PACK CPA FIRM?A Practice Management Bootcamp!1. Recruitment &

Retention

2. Realization & Utilization

3. Training & Coaching4. Business Development

5. Leadership Development

6. Succession & Transition