I have always thought of paid search (and even SEO) as a mistake in the consulting profession because it tends to lead to poor customer acquistion. In other words, it produces more D and F customers than A or B customers.
By their very nature web search prospects are in the gather information step in the buying process. They tend to be tire kickers who are generally looking at buying more on (pun intended) low price rather than a long-term relationship.
I think social media has the potential to change this because it turns search on it head. Instead of looking for people who already have their hand in the air (an intercept lead), social media allows the providers to look for people who have unrecognized need.
In my opinion, it is a much better place to spending marketing dollars.
He recently read the AICPA’s ”CPA Horizons 2025” report, and was inspired to write this post.
Since we here at VeraSage love a great debate, we’d love to hear your opinions with respect to this report, and Richard’s comments on it.
From Richard:
I just finished reading the recent report titled “CPA Horizons 2025,” which was put forth by the American Institute of Certified Public Accountants to describe both the current state as well as the future of the CPA profession.
Please allow me a couple of minutes to stretch my 6’2” frame, because to be able to read this report, I had to cram myself into a very small box.
The CPA Horizons 2025 report concluded that “the services that CPAs provide have become so varied and diverse that the concept of core services is no longer representative of the profession.”
This conclusion was reached based on interviews with approximately 5,600 CPAs.
To test the veracity of this conclusion, I emailed 17 customers, and asked them: Excluding me, since I am special (well, at least according to my mother...), what services to you think of when you think about what CPAs do? I received 14 responses.
13 customers said, in effect, that CPAs prepare income tax returns and financial statements. One customer said CPAs help their business customers to sleep better at night.
I like this last answer, but this particular customer never follows instructions, so I will disregard it in context of my specific question. I am glad, however, that this customer sleeps better since we started working together.
So the next question: if the AICPA-interviewed CPAs say that core services (preparing tax returns and financial statements) is no longer representative of the profession, then why do customers of CPAs not seem to know that? Let’s look for answers by reviewing the conclusions in CPA Horizons2025.
The first conclusion: the world is now driven by technology, and CPAs need to change how they do business to accommodate this fact. Really, the AICPA needed to interview 5,600 CPAs to conclude that?
The second conclusion: the CPA profession must find solutions to offer investors and stakeholders up-to-date, real-time financial information, because of how fast the business world now moves due to technology.
Okay, I’ll give the AICPA credit for pointing out that having financial statements that are current as of yesterday is an improvement over having financial statements that are only current as of last month of last quarter.
However, in both cases, both of these results are the recitation of history. Whether you are looking at last month’s bank reconciliation or yesterday’s bank reconciliation, in both cases you are looking at the past.
How about CPAs helping their business customers to predict how much cash the business will have in the bank at the end of next week, next month, or at September 30, 2012?
All of the technology in the world does not matter if CPAs cannot start to help their customers by looking through the front windshield of their car while they are driving, as opposed to trying to drive the car by looking through the rear-view mirror.
Objects in the mirror are closer than they appear: could that object be the irrelevance of the CPA profession in the economy of the future?
If CPAs cannot help customers to peer intelligently into the future, then irrelevance of the CPA profession will certainly be the result.
An additional benefit should result, that is to say, fewer accidents will happen. And for those of you who have forgotten Enron and Qwest, I offer you the recent explosion called MF Global.
The third conclusion: CPAs must embrace mobile technologies and social media to modernize and enhance interaction and collaboration with clients (AICPA’s word, not mine) and colleagues.
I flat out disagree, because my customers want consistent and repetitive face-to-face interaction, which includes ideas for value creation. The technology is merely how we transmit certain information.
I will in fact argue that the most valuable resource a CPA can create is a vast and talented and multi-disciplinary network of complementary professional (and other) services providers, that can assist customers with virtually any need that the customer may have, CPA service-centric or not.
This is not accomplished through spending one’s days typing emails and playing with the latest and greatest technology, it is accomplished through constant contact and face-to-face interaction.
I will further assert that tremendous improvement in technology has caused “reverse delegation” in the CPA industry, that is to say, multitudes of CPAs are now performing data-input based tasks because of the ease of use of technology, and given how much compliance work exists in the profession, many CPAs I know are so “busy” (man I hate that word...) that they have no time or energy to actually think about the future, whether their own future or their customers’ futures.
The thought occurs at this point whether perhaps the AICPA should have interviewed 5,600 customers (or in the AICPA’s words clients) of CPA firms instead, because it doesn’t sound like very many of the 5,600 CPAs who were interviewed asked their customers what they want (not “need") from the CPA profession.
But perhaps that would have been difficult, I suspect some of the answers may have been hard to listen to, let alone to meaningfully respond to.
All of these conclusions beg the same question for any individual CPA: what business am I really in?
If for example 90 % of your revenue comes from preparing income tax returns and financial statements, then you are not a CPA you are a historian.
The larger question becomes: how do I differentiate myself from my CPA competition? What is exactly at stake if I am unable to differentiate?
The fact is, most CPAs could not even sell cheeseburgers to the Donner party. I looked at 8 CPA firm brochures (yes on paper, not on the computer) and they all basically say the same thing: “we provide full-service income tax and financial statement preparation services that are of very high quality.”
They also all have a lot of pictures of men 55 and older wearing dark suits. No differentiation there.
How can consumers of CPA services know what CPAs are actually capable of when most CPAs cannot differentiate among themselves or away from traditional services? You are what you do (not say) every day, and consumers respond accordingly.
Next time, may I suggest to the AICPA that you interview 5,600 customers of CPAs? I’ll bet your conclusions would be different.
As the to relevancy of my profession in the economy of the future, if this report is the best that the AICPA can do, then I think I will call my stockbroker to buy short against my profession’s stock.
Last Thursday, I had the privilege to tour the headquarters of Zappos in Henderson, NV just outside of Las Vegas with my friend and Sage partner Judy Thornell of Baytek. (Thanks, Judy for arranging the tour!) Without question Zappos is an amazing organization. If you ever have the chance to go on the tour, I highly recommend it to a friend/colleague. (A little NPS humor there.)
As soon as you walk in you notice, the place is loud. The lobby/reception area is like no other in that it bustles like a Las Vegas Strip street corner with friends (more later) walking through, talking and high-fiving. What is more this is clearly not an accident, the location was chosen precisely because it is busy. The Zappos culture is on display. It was further demonstrated by this pillow made from a tee-shirt that was on the couch in the reception area.
Jerry (in the red shirt at left) was the ringmaster. He greeted everyone warmly (and loudly) and peppered us with a series of one-liners throughout our wait. At one point, one of the tourists asked about where the men’s room was. Jerry replied without hesitation, “We just use the bushes out front.”
Our tour guide was the effervescent Rocco (on the megaphone above - I told you it was loud) whose title on his card is, I kid you not, Culture Magician. Throughout the tour he referred to his co-workers as “friends in department name” or “my fellow Zapponians.” The use of friends was genuine and did not sound odd, except the first time he said it.
The first and largest department we visited was the CLT - Customer Loyalty Team. This 24-hour a day team is talking on the phones, replying to email and conversing via chat. Chat is the newest part of the team which has increased from 11 people to 55 in the last year. Their mantra which they shouted to us as we walked by is, “Once you go chat, you’ll never go back.” Too funny!
Every new hire regardless of their position with the company does four weeks of CLT training (that is what they called it). This serves two purposes: 1) it instills the Zappos values and 2) it serves as a backup for their busy Christmas season. Since everyone has done time at CLT they can all pitch in rather than hire temporary workers who do not understand the culture. Brilliant idea!
If the new hire is on the CLT, they then serve an additional three weeks of what is called “incubation: before they are fully on the team.
Every six months the CLT undergoes what is called a “shift bid.” This is where the teams reshuffle and through a bidding process people move from shift to shift or from subteams (like email) to subteam (like chat) in the CLT.
We then met the gal who holds the record for the longest call - 8 hours and 25 minutes. Someone on the tour asked if she took a bathroom break. “One,” she replied. They are currently producing a video about it, but in the meantime you can view this one about the previous record holder, Jennifer S. Her call was a mere four hours!
One of the coolest employee program that Rocco mentioned was the concierge service for all employees. They can drop off their dry cleaning, get their cars detailed, or even, have a gift purchased for a loved one. Now this is not a free service, the employee pays a fee, plus the price of the purchase, but again, it is a stellar idea.
Next up where the friend on the legal team. For privacy purposes they are the only team that has offices and even they are decorated with big red awnings that are too big for the narrow hallway. CEO Tony Hsieh has a cubical on what is called Monkey Row because it is decorated like a jungle. “Don’t worry, the fire department has approved,” we were told by Rocco.
On the subject of the CEO, we introduced next to the FACE team (they have lots of acronyms, but they are very self effacing about them). FACE stands for Folks that answer CEO email!
Near the end of the tour we were given the opportunity to set in their Royalty Chair. This area is a restaging of a room we saw on the tour previously where friends go to work through and personal goals with a coach. When they achieve their goals they get to sit in the chair. Below is my picture in the chair which they posted on Twitter.
After the tour Judy and I stayed for a brief round of Q&A with Rocco and Renea another tour guide. Perhaps the best answer was in response to a question on following process. “You don’t have to follow our procedures just get the job done,” Rocco responded.
PS - I learned about the Zappos app on iPhone during the tour. Mind you, it is unlikely that I personally will buy anything on it. This is not a reflection of the app, but the fact that my wife Christine is in charge of any and all wardrobe purchases. What is significant is that I showed it to my sister-in-law who initially poo-pooed it saying, “I like to go into shoe stores so I can see and touch and smell the leather.” Well, after five minutes of playing with the app, she said, “I am smelling the leather!”
In the past week I have been in meetings where a) the differences between the “generations” at work, b) Myers-Briggs tests, and c) PDP tests, have all been cited as the basis for decision making. In my opinion, they might as well have just added zodiac signs.
Over the years I have found these “tools” to be, at best, slightly amusing parlor tricks and, at worst, weapons used to psychologically maim people.
An example - one person retorted when I expressed my views on this hokum - “My profile says I need clear direction when given an assignment. I need to know why. When my boss gives me a “why,” I always do better on the assignment.” Really? Is there anyone who prefers to kept in the dark and doesn’t benefit from understanding why?
Do you see my point? This stuff is most universal assertions packaged in professional gobbledygook (thanks Michelle Golden for reintroducing me to that word). They are the business equivalent of, “I am a Scorpio, as a desert sign, I like long walks on the beach.”
The problem here is that these labels (Gen X, Gen Y, ENTJ, ISFP, High D, Low C, Aries, Scorpio) blind people to the truth. The best example I can give you is politics.
Last night I post this story and graph with the following comment - “Attention Republican/Conservatives, your party is not in favor of smaller government.”
My friend, John, replied, “Why would a well-paid, well-pensioned, government employee favor smaller government? And even if it’s their ‘platform’, why would anyone actually believe them?” Great point!
My reply, “For the same reasons that Democrats/Liberals believe that their president was going to end the wars - They are blinded by labels.”
Labeling people does not promote good decision making, it promotes blindness to the truth.
On August 9-10 in San Francisco, Ron Baker and I will once again be presenting our Firm of the Future Symposium sponsored by Sage North America.
This symposium will be dedicated to the possibility that a professional organization can be run more effectively when it becomes a knowledge firm rather than a service firm. Creating such an organization is hard work and not for everyone as it requires professionals to think differently than they have in the past about what it is that they do.
Objectives
From a focus on revenue to a focus on profit
From a focus on capacity to a focus on capital management
From a focus on efficiency to a focus on effectiveness
From a focus on cost-plus pricing to a focus on pricing on purpose
Sage (Ed’s employer) has agreed to open a limited number of spots for firms that are not partners of Sage. If you are interested in joining us, please send me an email and I can get you registered. The price is $2,500 per person and comes with a 100 percent money back guarantee!
One of the more interesting stories to emerge from our previous FotFS, was that of Peter Coburn of Commercial Logic. They are publishers of, you guessed it, time and billing software. Peter underwent a conversion of sorts and posted a terrific article on it.
Once your employee has learned a bad behavior, changing it will take considerably more time than would have been required to put in a good one. I am sure someone will have the answer to why it happens, but all too often a employee will learn a bad behavior in a split second that can be very difficult to change. Putting in a good behavior to replace it will take more time and more repetitions.
Do not feel your employee knows and will consistently offer a wanted behavior simply because he does it a few times on command. Often, we desire a behavior to be automatic with no command. If we are consistent, that behavior will become a natural and accepted habit.
Initially we provide guiding actions, controls, and controlling equipment, such as checklists. We also control with our voice and our body. Plus, we lure, reward, and reinforce the wanted behaviors to show our employee what is expected in everyday situations. Do it enough and the behavior you are guiding him into will become a habit. A well-behaved employee is simply an employee with good habits!
When training an employee, it is important that we do not make mistakes that create an unwanted behavior. Think ahead. Do not make a big issue out of imperfections, but learn from them and work to create a better action and avoid the imperfection the next time.
We are really helping the employee to learn. The employee should come to see our actions as rewards or non-rewards—and not be fearful of us in any way. The “reward” can be praise or another positive result. A “non-reward” does not mean punishment, but simply that you withhold the positive result. This way he will want to work with us and please us within the partnership. By thinking ahead and using common sense, we can achieve that.
Think training and education are still the same thing, click here for the original article. Don’t offer training to your employees and customers - educate them instead!
In the third DETalks, Matthem Burgess shares with us his journey that led him to found eLawyer.
The convergence of value pricing with true technology innovation has forced many to revisit the ‘traditional’ delivery of legal services.
In the estate planning space, many components of the process that have historically been fiercely guarded by lawyers can in reality be provided far more effectively by other advisers, particularly accountants, financial planners and risk advisers.
eLawyer is an innovative web based law firm developed by one of the largest Australian independent law firms and the only large law firm to have a dedicated and continuous estate planning focus for over 50 years.
In this DET, managing director Matthew Burgess provides a snapshot of the framework explaining why elawyer was developed.
They promise it will be “a podcast like no other.” The THRIVEcast begins in July 2011, brought to you by the innovative people of the CloudSolutions Alliance.
Jason and Greg will take you on a journey of learning more about our profession, with a twist of dysfunction and humor.
Bob Harper, friend of VeraSage, and owner of Portfolio, a UK-based marketing company for professional firms, recently published a fascinating report: GRF is killing the profession.
GRF stand for “Gross Recurring Fees,” and it has created a sense of complacency and entitlement in the profession, leading to a lack of innovation, dynamism, focus on value and customer service excellence, and other deleterious effects.
Nine consultants and thought leaders to the accounting profession contributed to this report, including: Bob Harper, Dennis Howlett, Mark Lee, Mark Lloydbottom, Michael McKerlie, Finola McManus, Steve Pipe, Paul Shrimpling, and yours truly.
If you lead or work in an accounting firm, you need to read this short report, and pay special attention to why GRF will no longer be the basis for valuing accounting firms.
At a recent conference one of the speakers presented the following syllogism:
What drives a company -> sales
What drives sales -> marketing
What drives marketing -> data
The implication is clear, ultimately data drives a company. Unfortunately, this thinking is all too prevalent in the business world (perhaps, just the world, leave business out of it).
It is also wrong. Actually, it is not just wrong, it is confusing cause with effect. Data is not the cause of company activity, it is the effect of it.
Instead, I would like to posit the following syllogism:
What drives a company -> profit
What drives profit -> creating value for customers
What drives value for customers -> innovation
What drives innovation -> knowledge
What drives knowledge -> relationships (conversations)
In my chain it is relationships that ultimately drive a company.
The main draw is entitled, Tomorrow Is Today: The Accounting Firm of 2011to be delivered by Darren Root of RootWorks and Ron Baker of the VeraSage Institute. (Oh yeah, a guy by the name of Ed Kless is going to be there to moderate the fireworks.)
Darren is the co-author (with Michael Gerber) of The E-Myth Accountant. Ron’s just released book isImplementing Value Pricing. While the two agree on many topics, including the need for professionals to set fixed prices for engagements, there are other areas where they are not in alignment. This, to me, is where the fun will begin.
The presentation runs from 9am to 5pm and is dedicated to the possibility that accounting firms as we traditionally think of them are dying quickly. In order to ensure their survival, firms need to radically transform themselves. Creating such an organization is hard work and not for everyone and many firms will not be able to make the transition at all because this transition requires us to think differently than we have in the past about what it is that we do. You are invited to open a dialogue on a different model for creating success in a professional firm.
Here is the “time is money” quote from the article - ”Harvey Miller, a bankruptcy partner at New York-based Weil, Gotshal & Manges, said his firm had an ‘artificial constraint’ limiting top partners’ hourly fee because "$1,000 an hour is a lot of money.”
Yeah, the “artificial constraint” is called the almighty billable hour! At least poor Harvey is a bankruptcy attorney, so maybe he knows better.
MAS 90 Guru, Wayne Schulz, told me about a cool customer service feedback mechanism that 37signals uses. 37signals are the creators of Basecamp, Highrise, Backpack, and Campfire, all web-based collaboration software solutions.
What they do is post, for all the world to see, the rating of there most recent 100 interactions with customers on a simple three point scale: great, just OK, and not so good. They tally the ratings and post them on a real time basis.
This is brilliant. It is simple, easy to understand, and I would think relatively easy to do.
How about doing them one better and posting it on your home page?
Last Sunday, my wife and I brought my son, Sean, and daughter, Cara, to the Imagination Movers concert at the Verizon Center just outside Dallas. To coin a phrase, a good time was had by all.
For those of you not familiar with the “Movers” (as we in the hip-in-the-know-’cause-we-have-a-five-year-old crowd like to them) let me give you some quick background. The Imagination Movers are a kid-focused rock band that began when a group of four friends in New Orleans discovered they shared a similar distain for music groups oriented for children. (With this I agree with them. Barney, Teletubbies and especially The Wiggles are downright creepy.)
They achieved significant regional success, selling over 100,000 copies of their independently produced CDs. In 2006, they inked a deal with Disney and for the past three years have been one of the top-rated shows on the Disney Channel.
Aside from being a pretty darn good writers and performers, the messages they convey in their music and on their show is spot on for their audience of future knowledge workers.
Each show centers around a different customer (yes, they call them customers not clients) coming into their Idea Warehouse with a problem that needs solving. The four Movers than ask some diagnostic questions (notice they do not jump to a solution!) until they decide that they do, in fact, have an Idea Emergency (I love this term). This phrase always trips an alarm and begins the song called Brainstorming which is sung in every show.
Because there are “no bad ideas when you’re brainstorming,” the Movers always end up solving the problem for their customer. Now the exchange of money is never talked about, but a few of the shows have focused around the guys solving some of their own problems, including one episode in which they record a TV commercial to attract more customers. In another episode, Bad Hair Day (one of my son’s, OK, one of my favorites), they need to help Mover Scott get his hair under control so they can take a picture for the newspaper.
In the first season, there was a neighbor called Knit-Knots who always wore beige, played only one note on his tuba (b-flat because, “the b stood for boring and the flat made it extra boring"), and did nothing in his office but “staple, stamp and stack” papers. While I rather enjoyed this slam at the monotony of the office service worker, it was clear that after season one, the gag had played itself out and Knit-Knots is not in season two or three.
Knit-Knots’ niece, Nina, however, has continued on the show in part to bring some female presence, but mostly because the actress that plays Nina, Wendy Calio is quite a talent herself. The live concert featured her in a cover of The Black-Eyed Peas’ I’ve Got a Feeling. Dare I say, she has a much better voice than Fergie.
I strongly recommend the Imagination Movers to any of you with children or grandchildren. Heck, maybe it should be required viewing for all current knowledge workers.
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