This episode kicks off a multi-part series related to the theme of Scaling New Heights 2016 – “The Epic Practice.” The series begins with Joe Woodard’s keynote that launched the 2016 conference. During the keynote, Joe drew from the powerful stories of ancient Greek mythology to highlight the characteristics of The Epic Practice like endurance, resilience, and focus. “The Epic Practice” series will continue with Joe Woodard in future episodes in which Joe will cover 3 adjectives per episode, challenging all accountants to be not just competent, not just efficient, not just profitable…but also heroic.
Thank you for tuning in to this episode of the Scaling New Heights Podcast. During Scaling New Heights 2016 in Atlantis, we had a powerful theme for the show called the Epic Practice. The Epic Practice has several key characteristics. And in my opening keynote, I delivered some of the key characteristics of an Epic Practice. You’re going to hear those today. And during future podcast episodes, I’m going to detail other characteristics of the Epic Practice, those that I did not have the time to cover during the context my keynote presentation at Scaling New Heights 2016. We’re going to kick off the Epic Practice Podcast Series with the opening keynote from Scaling New Heights. Watch for future podcast episodes on other characteristics of the Epic Practice.
Words have power. They have the power that we give them - to either benefit us or hurt us. This whole concept of “sticks and stones may break my bones but words can never harm me” is myth. It is not true. Words can be very damaging, but only if we appropriate the damage. We have the control over what we appropriate.
Over the next few minutes, I'm going to go through some adjectives with you. I'm going to talk about those adjectives that describe the Epic Practice and I want you to appropriate these positive adjectives. I won't be able to get to all of them. I'm going to tell you what I'm going to do with the rest a little bit later, but I am going to cover the ones that I think are most pertinent, the ones that are foundational, the ones that if you begin working on them right now you can begin your journey toward the Epic Practice much faster and in a much more stable way.
I'm going to do this through a series of stories. Stories are powerful. It's now become cliché to say that a picture is worth a thousand words, but there's a really cool new saying that’s just came out that I think is even more powerful - that a story is worth a thousand pictures.
I’ll give you the power of story. How many people have said no to a client because I grabbed a cat out of a bush? But if I had just told you to be selective with your clients back in 2014, that story would not still be resonating. I told you a simple story of rescuing a cat out of a bush and it was worth a thousand pictures. I'm now going to tell you three or four stories in hopes I can get 4-5,000 pictures and somewhere around 4-5 million words out in the next 30 minutes.
I’m going to start with the story of our friend Atlas. Atlas teaches us much about the power of Greek mythology. Atlas tells us much about the pillars of an Epic Practice. Atlas teaches us much about endurance. Endurance is one of the pillars, because building an Epic Practice is never a straight path.
Have you ever noticed in your practice, everybody else sees you going from point A to point B to point C to point D in a straight line? And they applaud you, they celebrate you for it, maybe even in a professional sense, envy you for it. But what they don't see is everything that happens in between those milestones, all the volatile ups and downs and all the strain and all the pressure and everything that you have to bear in order to continue to build your Epic Practice.
If your Epic Practice is going to endure, if you're going to build something now that is going to last not just until the time you retire, but is going to last beyond you, then it needs to have some structure pieces. It needs to have some elements in it that will cause it to endure. One is a focus on intellectual capital. Intellectual capital is not a word we talk about much in the accounting profession, but it is a word that we need to embrace, it's a concept we need to embrace very deeply. It means that the knowledge I have in my brain and, beyond that, the appropriated knowledge that I have placed into and infused into the systems of my firm is an asset.
Some of you are going, “OK. Well, no, capital is equity.” Don't overthink it. It's an asset for your firm. It's OK if you want to call it equity for your firm. It doesn't matter. It's still on a really good side of the equation.
The point is you need it in order to endure. They're going to be clients that are going to press against the strength of your intellectual capital and when they find weaknesses and they find gaps, they may not fault you for it, they may not fire you for it, but they are going to supplement you because of it. The fewer cracks, the fewer weak spots, the fewer gaps, the more you can be a holistic consultant to your clients, and the stronger the trust will be and the more enduring the client relationships will be.
But unfortunately, too many times in our profession, we see the investment in the building of intellectual capital as a loss instead of as a gain. And it’s such an easy thing to do especially for folks that are sole practitioners, because they feel that pain most directly. If they don't have other producers producing revenue at that very moment, they are literally spending whatever their bill rate is - if they're still billing by the hour and whatever their productivity rate is if their value billing - they are literally spending that money against the investment of intellectual capital.
All I can tell you is if you don't make the investment, you're winning a battle and you're losing the war. You will have a successful moment, you will be a bright and shining star. You'll have whatever your equivalent is of fifteen minutes of fame. But will your practice endure? Will your practice be something that other people will want to buy, join, invest in, earn their way into? Is it something that your own children or other successors will want to follow you around? No. Because everything you know and everything that is of value to you is stuck within the circumference of your skull and it isn't an asset for the actual company.
There's another pillar of endurance: systems and processes. It kind of plays along the same line - except instead of it being the accumulation, appropriation and documentation of knowledge - it is the process of intellectual capital. This is the systems and the processes by which you deliver that knowledge to your clients. Do you have standard on-boarding processes? Do you have standard off-boarding processes? Do you have key performance indicators that will tell you exactly when and how and where to advance or retreat from a client relationship? Are you measuring the right things and do you have consistent enough processes so that your measurements are scientific? Or, are you just moving from brushfire to brushfire with your squirt gun (because sometimes it feels like a squirt gun)?
The difference between an established company, an Epic Practice - and I want to be clear, an Epic Practice can very much be a practice of one. You can stay sole practitioner all your life if that’s your goal and be Epic, but you still must have systems and processes. The difference between an Epic Practice and a shop keep is the shop keep has a bell that rings at the front of the door and they only respond when the client or the customer rings the bell. Other than that, they're maybe restocking their shelves or sitting around reading the paper or they're chatting with their friends. They hear the ding, they pop up, “How can I help you? How can I help you? How can I help you?”
I'm challenging you not to be a reactionary shop keep. I’m asking you not to only respond to clients when you hear the bell ring. I'm asking you to have systems and processes in place so that you can act against them in proactive ways and go out into the street, walk down to your client's place of business (figuratively or literally), meet them where they are, and ring their bell. Some of the examples of the bells that get rung are tax notices or even just tax deadlines as a form of a bell, payroll tax notices, sales tax notices, lawsuits, banks that need updated numbers.
The reason that we feel so frustrated and the reason we feel like we're not just Atlas trying to endure but we're Atlas trying to endure with all the forces of nature blowing against the globe at the same time, the reason we feel that way is because our clients are in control of our systems and processes, not us. And with systems and processes comes not only endurance, but also comes pro-action.
There are two more. Another way to endure is through a healthy and sustained team of professionals, because it takes a team. You might say, “Wait a minute, Joe. You just told me I can stay a sole practitioner. I'm perfectly fine.” Absolutely, you can. But even as a sole practitioner, it takes a team. It takes a team of your peers in a network environment like we have with Woodard Network and Woodard Groups and Woodard Institute. It takes a team of contracted resources, a pool of people you know you can trust so that when you get outside of your area of focus, you have resources that can pull you through all of that.
Assemble your team, contracted or employed. At this point, it doesn't make a difference. Just have a team. And then you become the orchestra conductor of the team, you become the single point of contact for your clients as they engage with the team. Then you can scale, but beyond scale as your scaling, as you're handling more clients’ needs, as the needs become more complex, as the weight of the world gets heavier and heavier, Atlas is no longer alone. Maybe he can do it by himself, but I'm telling you, none of us in this room - including me – can.
The last thing I'll tell you about endurance is mentorship. Inside this room is my mentor. I have about five in my life and one of them is sitting here, that is if he got his lazy bottom out of bed this morning. You know who you are. My CPA is my mentor. He coaches me, he’s a sounding board. I run things past him and he knows exactly everything going on in my life - the good, the bad, the ugly. Where you guys see the straight line, I can guarantee you he sees every single dip and he sees every single elation. And he sees that because he is pouring into my life; he's investing in my life.
There are two kinds of people that you need to have in your life - those that you're investing in and those who are investing in you. You need to be both a mentor and a mentoree in your relationships. Find that person. Trust that person - not blindly, they need to earn it - but once they've earned it, trust them. Become vulnerable with them and let them give you much needed perspective to get through your circumstance.
There's another element of endurance. Individually we must endure. Mentorship will help with that. In terms of a practice, we must endure. All of the elements I just shared with you are key to that endurance strategy. I don't have time to drill down on every one, I could actually teach for two hours on each bullet, but the good news is I'm only telling you things you can drill down on at the breakouts here.
But there's an endurance that is broader. There’s an endurance that is bigger. There’s an endurance all the way to the whole of humanity, thanks to our good friend Prometheus, the Titan. Prometheus was Zeus's first cousin. He was a son of the Titans, just as Zeus was a son of the Titans, and he loved humanity. Zeus? Not so much. Zeus would have just as soon not been bothered by us and Zeus would have just as soon wiped us out. But it was Prometheus who came to save the day. It was Prometheus who loved not just humans but all living creatures on the earth.
So he gave to some of the animals the gift of speed and he gave to other animals the gift of extreme sight or extreme hearing. And then he got to mankind, and because he didn't really have an order to how he handed out and doled out all these gifts, he didn't have anything left. But he loved mankind more than he loved all the other creatures on the earth and he wanted to give us a very special gift. He went to the secret place of the gods, where the secret power of the gods resides. He went to where they stored their fire. Up to that point, mankind did not have fire and without fire they could not forge weapons. Without fire, they could not branch out into new territories where the fire was necessary for their survival. Without fire, they couldn't cook all kinds of food. Without fire, humanity would not have survived. Thanks to Prometheus, thanks to his gift of fire, humanity endured, not because of our creativity, not because of our ingenuity. Ultimately humanity endured because of fire.
I need you to think fire. I need you to remember fire. And every time you think about it, I want you to think about the Phoenix. I want you to think about what the Phoenix represents – the resilience, beyond endurance. Endurance means that what I've already built, I will sustain and I will sustain it in a way that endures beyond all of the obstacles. But what if everything seems to be gone? What if everything seems to fail? What if nothing seems to go right? Forget endurance. I can't even get the globe up off the ground and above my shoulders, is how you might feel.
Whether it's life, whether it's your practice, we are carrying the weight of the world on our shoulders and we are dealing with situations our clients have no idea. Sometimes, our family members have no idea. And under all of that, where we feel like everything is going to fall apart any given second, somehow we have to stay the hero. And the only way we can do it is if there's something inside of us.
I’m going to talk to you now not as practitioners, I'm going to talk to you as people. If there is something in you, the person who has chosen to be a practitioner, that is resilient, you can survive through all of the fires of life like the Phoenix survives the fire of its death. You can be born anew constantly inside of yourself and, as a result, endure; as a result, sustain the Epic Practice.
Let’s talk a little bit about the fires. The fires come and they are inevitable. Whatever it is you're going through right now or whatever it is you've just been through… Imagine that right now and know that you're in one of three places when it comes to the fires and the storms and the trials in your life. First place, you’re in it. You’ve walked into this conference in one. As a matter of fact, you might even have thought about not getting on the plane because you didn't know how, dealing with everything you're dealing with back in your personal life or whatever is going on, that you could even get this trip in. I'm hoping you're glad you came now. I'm hoping you'll get some strength. I'm hoping the fire will become a Phoenix element to you, a rebirthing to you, that you'll be rejuvenated. But you might be in a fire right now or maybe you're just coming out of a fire right now.
I have a hard dose of reality. If you're not in one and you're not just coming out of one… here it comes… you're going into one.
You need to set the right expectations for the whole of life on planet Earth. Humanity is messy; you are messy. Everybody that you interact with in your entire life is messy - your kids are messy, spouse, significant others, clients, coworkers. We are a bunch of messy people working with messy people. We hurt each other whether we plan to or not. And some people are so messy they plan to. If you just understand that that's not a pessimistic view of humanity, it's an appropriately realistic view of humanity, then you will set the right expectation. I'm going to enter into a relationship with this person personally or professionally and they are going to hurt me. OK. Am I ready for that? Not like I'm hypervigilant, not like I'm just waiting for the other shoe to fall, not like I'm walking around gun-shy; just, this person is going to hurt me. Go in eyes wide open and know what you're signing up for.
You're signing up for the scars. There's a really cool singer, Rich Mullins, and he was quoted once as saying when somebody challenged him once and said, “I'm just tired of relationships because I get wounded too much.” His reply was, “Aren't we supposed to have scars at the end of our lives?” He followed it up with this, which is even more powerful, “And if we don't, what kind of life did we live?
If you just set the expectation that life is messy, people are messy, and you’re messy and sometimes you start the fire and sometimes somebody else starts the fire and then you just have to get in there and work the fire together, then it isn't a pessimistic view and it’ll actually give you the tool set you need so that disillusionment, discouragement, and surprise don’t overwhelm you when you're trying to get through that fire.
The other thing I would tell you if you want to be a person of resilience, give up justice. It just doesn't exist in this world. I’m sorry, I wish I had a better answer. Our justice system is actually one of the best on the entire planet and look at it. I'm glad it's the best on the planet, but look at it.
Justice is elusive. Even justice in one-on-one relationships is elusive. Let me just tell you right now, you're never going to get the apology that person owes you. You're never going to get the money they stole. You’re never going to get the years back where they lied to you. NEVER. I'm sorry, but you're not. The choice is - how do I respond to the fire? Do I let it consume me or, like the Phoenix, do I let it refine me so that I emerge from it fresher, newer and more vibrant, more prepared to go into the next relationship? Because your scars aren't ugly things, your scars are learning lessons that allow you to be better in the next relationship, stronger as a person. It gets back to the old cliché - what doesn't kill me, makes me stronger. So cancel the debt.
One time somebody stole my car and I was going to the judge and I was sitting there. They were on the other side of the deal and they had these little kids. They had gone to AA because they were drunk when they stole it; they were trying to get their lives back together. Their wives were there; their kids were there and they were just little bitty kids. They had no money, and the judge was about to rule that they had to pay me this large sum of money, which to me was large at the time, to pay for the difference on my car insurance from deductible and all of that. I knew they didn't have it, but even if they had it, they were trying to get their lives back together and they had small children to feed. I said to the district attorney, “They don't need to pay me anything. Whatever is between you and them, that's between the state of North Carolina and you and them, but they don't have to pay me anything.”
When the judge read that off in court for the court reporter he said, “Let it be known,” - this is a legal term in the state of North Carolina and I imagine it is a legal term in fifty states. He said, “Let it be known the plaintiff forgives the debt.” And it occurred to me at that moment, and I've used this to sustain me all the way through all the days of my life, that forgiveness is not an emotion. Forgiveness is a choice, because at that moment all I wanted was my car back. At that moment, all I wanted was for them to undo what they had done to me. My emotions didn't dictate my situation, my choice did. Here’s the really interesting thing. Once I made the choice, the emotion changed. If you're a person that stops seeking justice and starts seeking forgiveness, then you will be resilient.
I wish there was an easier path. I tried to find bullets that were easier. I'm sorry. They just don't exist.
Be intensely others-focused. The more inwardly focused you are, the more the fire burns at the core of you instead of burning off the outside bad stuff. It consumes the Phoenix from the inside and destroys the Phoenix. But instead, if you're others-focused…. You may say, “Joe, I don’t have the strength to even deal with my own problems and you're asking me to focus on somebody else's?” Yes. Because there’s something very strange that happens in human relationships. I have certain explanations for it, other people have others, but you can't deny it exists.
If I forget myself for a moment and I hand a cup of soup to a homeless person and I do that on an afternoon, no matter what I'm going through, no matter how bad it is, no matter how much time I lost dealing with my own problem, something about that four hours of handing that soup to those homeless people in that soup kitchen, or whatever it is you choose to do, gives you resilience. It rejuvenates you. It gives you energy. You stepped out of yourself for a moment and you stepped in to the needs of others, and maybe what you got from all of that was perspective, because maybe the big client you lost? At least you have 500 cans of soup in your pantry.
Live in the present. There is this crazy, crazy thing where reality intersects my life. I've got a name for it - and you might want to write this down, because this is a Joe original - when reality intersects my life I call that … “now”. “Now”. That’s “now”. And the only reality ever is now. What happened yesterday is non-reality. What's going to happen tomorrow is non-reality.
You saw my daughter here earlier and she inspires me. She has no idea she's doing it, but she inspires me by just being a child. Because children live in the present and how many times have we said of something, when a child's been hurt or a child, especially if they've been emotionally hurt, if they've been bullied at school, whatever it is they might have gone through, our typical response to that after we've comforted them and the grown-ups are talking we say, “You know she's going to be OK, because children are resilient.” Now you know why. Now you know their secret. Karis is over there going, “You shouldn’t have told my secret. That's just for the kids’ club.”
But the secret to resilience is you live in the present. You're not consumed with worry about the future. I've got a great little line for you, a little essential idea. “Worry is the interest paid on borrowed trouble.” That resonates well with accountants, right? Worry is the interest paid on borrowed trouble. Most of what we worry about doesn't even come true. So we manufacture this whole pseudo-reality where the vast majority of it never even intersects our present; it never becomes now. But we have lived under the weight of it for so long that not only can we not endure, but we can't be resilient. Stop paying the interest on that borrowed trouble. Start spending the cash of now.
And as far as the past, guilt? Guilt is also non-real, it is unreal. It could be because somebody else is thinking they have the power to heap guilt on you. Their un-forgiveness of you does not give them the power to make you guilty. Don't give them that power. Your past doesn't have the power to make you feel guilty. Remember? It's not real anymore. You go, “Wait a minute, Joe. What about the hurt? Because the hurt of the present I feel now from the past is real.” Yes, it is. And it's the stuff that scars are made from and we've already talked about those. Those are our friends.
It's all about changing - not your circumstances, because often in life you cannot change your circumstances. But let me tell you what you can always do, if you have the will to do it. You can always change your perspective to your circumstances, and the resilient person keeps that perspective.
I'm going to tell you the story of Atalanta. Atalanta was the fastest runner of all of ancient Greece of her time. It really irked all the men that she was a woman and could pull that off. So, she would out run all these men and outrun all these men and finally she got so tired of being challenged, that she said - she just got tired of running against the men because she would just beat them so easy - she said, “I will marry the next man that can beat me in a race, but every man that loses I will kill.” That has a lot of applications….
Off she runs, and a few men die until one man got really smart. His name is lost to antiquity, but not his shrewdness. He had the most beautiful apples that Atalanta had ever seen. She saw the basket of apples in his hand before the race started. He was very fast; he could almost keep up with her, but every time she would start to pull away from him, he would take one of the apples and he would throw it. She would stop to pick it up, because she just couldn't resist. Then she'd catch up again and he'd throw the apple and she couldn't resist. He did that enough times that he barely won the race. And this time it has a really happy ending. She fell in love with him and they spent the rest of their lives together.
But, most of the time when we're distracted by the apple, when we lack focus, it isn't a happy ending. I will tell you that to have focus in your practice you must have the right services. You must have services that give you distinction, that highlight your core competencies, that are work life harmonized. They need to come out of the core of who you are as a person, not just be something that you're doing as a trade. And definitely don't trade that trade for hours for dollars. Focus on services that increase your client's wealth and well-being and then charge a percentage under the wealth you generate, not a percentage over the cost you incur.
You need to have the right clients. They need to be of the industry that you're passionate about serving. They need to also be in keeping with your core competencies. They need to reflect the culture of your practice. We have a client right now that does not reflect the culture of our practice and every single person here with a Scaling New Heights or Woodard shirt on knows exactly who I'm talking about. They don't even have to think for one minute, because one client that is not a fit for your culture can harm the entire culture of your firm. They need to be ethical. They need to be teachable.
Because at the end of the day, our product is not the services we perform. Our product is more transcendent than that. Our product – are you ready for this? This is a Ron Baker thing and it's powerful. Our product is our clients. Everything else we do is the machinery that produces or manufactures our product. The question is how good is your product. And you might say, “My product won't let me create a good product.” Exactly! Which means if your clients are not good raw materials then you're not going to create a product that is worth anything. That means that if you don't have good products you need to get better raw materials
I've got another story. See, you thought Atalanta was the story. She kind of was. Now for the more memorable story, every time you see an apple, I want you to ask yourself, “Are you focused in your firm? Are you intentional? Do you have the right services and the right clients? Are your clients the right raw material so you can create the product you know you're capable of creating? When you create that product, will it be so valuable, that you can finally truly value price?”
You need to have highly differentiated services, because you might say, “Joe, I can't value price because everybody around me is driving the price down.” Stop doing what everybody else is doing and you will insulate yourself from that. There are only a handful of firms in the entire world that can do the Method projects that Woodard Consulting does. A lot of firms can do Method projects, but we do really big Method projects and our peer group is about five firms. The one we're working on right now has about a two to three year run time on it. It's a six figure engagement for a 30-million-dollar company. About five firms can do that one. It really doesn't matter what the firms down the street are doing. I'm insulated, I'm differentiated, and I can finally price as a percentage under the wealth I generate, because nobody else is trying to undercut me on price. Be differentiated; it's an element of focus.
Thank you for tuning in to this episode and the keynote presentation that I delivered at Scaling New Height 2016. For more information about today’s episode, to explore other episodes in this podcast series, or to learn more about our annual conference, visit Woodard.com. As always, we encourage you to stay tuned, stay connected, never stop learning, and scale new heights!