Scaling New Heights Podcast
The Epic Practice – Part 2
During this episode, Joe Woodard addresses 5 pillars (characteristics) of an epic practice. Part 2 of the series is a continuation of Episode 1, in which Joe lays the foundational qualities of creating a practice that matters from the main stage of "Scaling New Heights 2016." Joe will wrap up the series in Part 3 with 5 additional qualities every practice should strive to achieve to become differentiated, effective, innovative and EPIC.
Link to Joe's podcast: http://scalingnewheights.libsyn.com/episode-11-joe-woodard
Link to the full library – http://scalingnewheights.libsyn.com/
Full transcript of the episode follows:
Thank you for tuning into this episode of "The Scaling New Heights Podcast." During this episode, I will share five additional pillars of an Epic Practice. This is Part 2 of a three-part series that began with my presentation from the main stage of Scaling New Heights 2016 and will continue on to a third and final segment where I will cover an additional five pillars.
The five pillars we're going to cover today are – be purpose driven, have powerful systems, number three have empowered teams, number four be proactive and number five be unique. These are five pillars or characteristics of an Epic Practice. Let's start with the first of the five we're going to cover in this podcast episode – be purpose driven.
Many of you who have tuned in to previous podcast episodes, or have heard me speak on many main stages across the country, have heard me talk about the importance of vision, mission and purpose. Vision is a true north, it's the compass direction that you point to, so you can always use it to know if you're walking in the correct direction. The vision at Woodard is “to transform small business through small business advisors”. That is our true north. If anything comes along our path, however big the opportunity may be, or any activity that we inherited from our pre-visionary past, it all must give way to the true north. We must walk away from it as we walk toward the transformation of small business through small business advisors.
But like any good vision, it (Woodard’s vision) is not fulfill-able. I know that sounds crazy - why have a vision if you can't fulfill it? The point is for it to direct you, to be a north to which you point. It isn't a destination any more than the actual magnetic north pole is a destination, but we use it all the time to steer (or at least we did before the days of GPS so we'll stick with the analogy). If your vision can be completed in your lifetime it is too small. If your vision can be completed by yourself, it is too small. It must be something that requires a team, a team that is greater than the sum of its part. It must be fulfilled ultimately through its succession, through the fact that it's inherited by generations that follow you.
The mission is fulfill-able. Your mission statement is extremely doable; as a matter of fact, you can do it, you can measure it and you can repeat it with greater amounts of excellence. If we're to transform small business though small business advisors our mission statement is very doable, very realizable. It means that we're going to provide the nation's best and most in depth training to accounting professionals. We're going to foster networking relationships. We're going to create valuable resources. We're going to foster new consulting opportunities or generate new consulting opportunities. These are the missions that we perform and we do them on various levels every day. As I'm presenting this podcast in Georgia we're doing an event right now in southern Florida and we have more lined up for September. Our organization is all over the country at any given time training accounting professionals because our vision is to transform small business through small business advisors.
Then we get to the purpose. The purpose statement is what connects everything else you do to the daily actions, to the ground, to every step. That purpose statement should define every action that every one of your team members performs. If it doesn't, it means for that moment they're off purpose. The purpose at Woodard is “we empower small business advisors”. That means that right now the person running the Florida event is empowering small business advisors. That's really, really easy to get.
Right now in the room next to me, in the office next to me, my bookkeeper of the company is also empowering small business advisors, because without her keeping the organization and the cash and the banking and the general ledger financial reporting and the entire office in shape, then we couldn't focus right now on empowering small business advisors. If it's direct or if it's indirect, everybody comes to work understanding why they're here and every task is infused with fresh purpose.
I would challenge you to do something similar in your practice, find a vision statement that's a “BHAG”, a Big Hairy Audacious Goal, and then create a mission, a series of mission statements, if you will. I know we typically talk about mission statement being a singular statement but I like it to be bullets. I like it to be what you do, then something that you can measure and repeat, fulfill, accomplish, repeat. Then find a purpose statement that will motivate your team members and focus your team members in your firm to act with extreme levels of intentionality and higher levels of motivation. An epic practice is a purpose driven practice.
Now let's get to the second pillar we're going to cover today, that's powerful systems. So many times accountants know how to perform a role, and they know how to work their specific desk. There are some layers of systems that allow them to work and collaborate with other people in the office, but that single professional understands that professional's desk and that professional's client load and work load, and if that professional leaves it's intensely disruptive to the firm. Then you have different isolated processes and systems that people deploy, and sometimes even software solutions, that associates perform within a firm that aren't connected back to leadership, to management, and are not even necessarily realized by management. It's just some “thing” that somebody went and grabbed on an expense report a year ago and nobody even knows that they're using the tool.
Epic practices have a single defined infrastructure, a single suite of products that are all designed to work together with both collaborations between the client and the firm and between each professional and the other professionals in the firm. You're not going to get to this overnight, but what I would say is the journey toward this epic pillar, the way you start laying the stones of the pillar, is through an audit of all of your information technology systems so that you can determine what your people are using. Then, start to regulate around the most common pain points and around the systems that you know are either creating workflow inefficiencies or security risks. Those have got to go first.
When you get all of your information technology in place and the team is using the same system and doing so in collaborative ways, it's time to dial the client into the system - so that your document management system is used by the client through some sort of a shared medium, a portal or a mapped drive of some kind, and so that you're using cloud technologies to collaborate with clients on an ongoing basis with their accounting system, whether that's a hosted desktop solution or a native cloud solution. You can see their data anytime, anywhere. You're not playing the waiting game at tax time, and you're seeing the file and touching the file and supporting the client throughout the year, not just at tax time. Of course those are fee-based services, value priced hopefully, for which you not only earn revenues throughout the year but provide value to the client by giving them confidence in their numbers throughout the year. It takes systems to make all of this possible. Systems will maximize efficiency, maximize collaboration between clients and fellow team members within your firm. There's your end goal, you can work with that end in mind and build everything back from that goal.
The third epic pillar is empowered teams. Obviously the systems we just talked about will empower your teams, but here I'm talking about more of a cultural level empowerment, where you do have teams, you don't have staff. We don't like the S-word at Woodard, staff, because it connotes that the person is in the service of their boss, which is another word that we don't like at Woodard. We call boss the B-word and we call staff the S-word. Let’s break down the implications of those words. If I'm staff like the butler or the maid in a mansion, I am in service to a person who is wealthier than I am, or more powerful than I am, or who has ownership in the entity that I'm employed by that is different from my own. I am relegated, I am diminished and I am in the service of the people who employ me. Now let's look at boss. By the way, you might defend that, "Aren't the employees supposed to be in the service of the people who employ them?" Give me a second, I'm going to come back to that one. Let's talk about boss for a minute.
Boss is actually a verb and it's not a very good verb. It's the barking of the orders. It's the assignment of the tasks. It's people running off to do tasks with no context, no sense of empowerment, no authority to act, no opportunity to be truly innovative, to effect change. They're simply machines that go off and do a thing, come back and report on how well they did that thing, hoping that the boss is going to appreciate the fact that they went off and did this well, or maybe not notice that they did it too imperfectly. And then their next order will be barked at them. Not only does that create a very dis-empowering culture and it stifles innovation, it is also not scalable, because as long as a boss is having to bark out the orders, let's call that delegating tasks, it is impossible for the boss to scale the organization behind what they can keep in their project management systems, what they can keep in their brain, and the number of direct people they supervise, another S-word that we don't like.
Because if bosses are supervising staff people, it means that we have staff people that are not only not authorized to act, they also cannot be trusted to act without the supervision of a grown up in the company, somebody watching over them to make sure they don't mess up. If we change that whole paradigm by starting with a change of the language and use the language “teams and team leaders” ... I'm the CEO of the company, that is the title on my business card, but operationally I operate as a team leader to four people in the organization, and then I have a couple of other direct reports. I have a marketing team I also oversee - four primary people and then a marketing team of an additional two.
Those people report to me as part of my teams. Teams function to accomplish enterprise level goals, but in every case of my direct reports, not the people I supervise - my direct report (it's another very important language change) - in every case I try to delegate authority not just tasks. There are some times as the owner of the company, sometimes as the team leader, I have to make a decision and run with it, it comes with the territory. But as much as much as possible and as much as my team members will permit me, meaning as much as they can handle, I delegate authority not just tasks. That allows my team to not only be more innovative and more empowered and more invigorated, more motivated, but it also means the organization can scale in ways it couldn't possibly scale if I were bottle-necking at the top.
Top down is another language change we need to make. This is all encapsulated of the concept of servant leadership. As soon as I delegate authority to one of my team members and it becomes their responsibility to succeed or fail, it is now my job because I have information and resources they don't have to make sure they succeed if at all possible. It turns the entire paradigm on its head, no longer do I have a staff member serving me, I have an empowered team member who themselves are a team leader with the authority to act and with the responsibility to succeed or fail. That puts me in a position, and only that kind of a model will put me into a position, where I can serve the person who reports to me, where I can focus on empowering them, giving them information and giving them resources and guidance and consultation necessary to maximize the chance of success. We present our org-chart at Woodard from left to right, meaning how far removed from the CEO of the company you are in terms of reporting structure, but I have an open door policy and any team member can come to me at any time and talk to me about anything. They don't have to climb an org-chart ladder to get there.
Now let's get to the fourth pillar we're covering today, proactivity. This one plays off of the purpose driven firm, but it's more than just saying, "I have a vision, mission and purpose." It's about connecting those things to the client relationship. There are two kinds of small business owners on the planet. There are those I would put in the category of small business owner, and then there are those I would put in the category of entrepreneur. I've spent a lot of time thinking through what it means to be an entrepreneur. We all have these conceptions in our mind of what one is. We typically think about a Silicon Valley software developer, or somebody that has an invention or game changing innovation. They go off and head headlong into the jungle, armed with their innovation, not even really thinking about anything else, and then start trying to seek VC funding.
Maybe that's a model of an entrepreneur, but I think entrepreneurship is a mindset. It's a mindset that makes its way to an action set. It doesn't have to do with the category of business you're in, and it doesn't even ultimately have to do with the nature of your revenue models, whether you're VC funded or not, or whether you strive to be the next Fortune 500 candidate or not. It's not about size and it's not about revenue model, it's about mentality and the way you engage customers.
Let's take a small business owner that has a grocery store, small main town general store. They've been there for 50 years in that community, they're a staple. They have a regular customer base and they've got people that come in every Monday like clockwork and buy the cereal and buy some milk and buy some bread. You know them by their first name. The bell rings on the front door and as soon as the bell rings on the front door, the people in the store, they jump up and they call to action. Ding, ding, ding. Up I go. Before then I was reading a newspaper, before then I was dusting a shelf, or before that I was maybe catching up on reruns of The Young and the Restless, or whatever. I only respond to a customer when a customer initiates a contact - meaning ding, ding, ding at the door.
Now take the entrepreneur version of that. Same grocery store, same small town America, still in business for the same 50 years, still have the same people coming in on Monday morning to buy the cereal, the bread and the milk. But the entrepreneur is engaging with the community proactively. They have a stand at the county fair, they write articles for the regional magazine on best dietary practices, or maybe a new recipes column. They're standing out in front of their store cooking up the latest recipes based on some new spices that they just had delivered from a distributor to get market results on whether the spices taste good and whether they should regularly stock them. They're engaged with their chamber of commerce. They are building an online community around the intellectual capital they're exchanging on diet, on grocery habits and trending patterns and pricing patterns and genetic mutation of seeds. Whatever it is that has to do with their category, they're learning it and they're disseminating that knowledge. Same store and same business model, but a completely different mindset and a completely different level of engagement with customers.
For the accountant we have to decide - do we engage our clients when the client rings our bell, and we don't have them walk in with a ding, ding, ding. We get it a different way. We get it in the inbox, or we get it in the voice mail for a few of our clients, and maybe for about 1% still a fax. We get the IRS tax notice, or we get a notice from the Department of Labor. Maybe it's not even the client directly ringing our bell or our front door, maybe it's just the regular cyclical tax schedules of all the different reporting agencies where we have to meet compliance. Maybe it's the bank that rings the bell, but it's always a world of reactivity, of response.
The accountant who is entrepreneurial is engaging with their clients throughout the year, having breakfast with the business owner at least once a month, going over financial projections as well as analytics of the past, coaching the business in how to have a better month going forward, a better quarter and a better rest of the year. Of course to do that you have to have accurate real time financials, so the most proactive accounting firms are taking that bull by the horns and bringing it back into the firm, doing it through and powered by cloud technologies. It's now a viable economic model to do that. They are engaging with the community by sharing intellectual capital. They're engaged online building online communities that branch beyond their local market.
The entrepreneurial accountant is characterized by two key qualities. They are innovative, meaning they deploy the latest technologies on behalf of their clients, and within the client's organization to the client's benefit; they are innovative. And they are proactive. That means the proactive accountant, the entrepreneurial accountant, is an epic practice builder.
The last one I'm going to share with you today is be unique. If your knowledge is shared by more than 5% of accountants within your nation, within your country, and about 5% of our podcast listeners are outside the US, so whatever country you live in, if your knowledge is shared by more than 5% of your peers, you cannot call it unique and you cannot call it specialized. As a result, you cannot value price it. We're going to talk about value pricing as one of the last five pillars of an epic practice in section three of this series. For right now, I just want you to know, you cannot value price anything that is not specific knowledge, and specific knowledge is shared by no more than 5% of your peers.
That means bookkeeping, tax, audit, all of the traditional accounting work that has become globally available is also, by its very nature, now commoditized. Any time knowledge becomes that prevalent, any time it becomes a model franchises will adopt, and they have, and when it becomes a model that software developers begin to automate, which they are, up to 80% of the bookkeeping process can already be automated, tax is the next domino to fall, audit will fall very quickly after that. If it can be replicated to extreme efficiencies, meaning a franchise model works, if it can be automated to the fact where it's completely frictionless or mostly frictionless, then you can never value price it. I am not saying not to do bookkeeping, tax or audit. What I'm saying is, leverage the technologies to extreme levels of efficiency so you can still have a viable profit margin when you do so.
Over the top of that, in addition to those and perhaps as your shiniest, brightest branded object, offer something that your peers don't offer in mass. Maybe it's an industry vertical specialization of some kind, which isn't enough to get you to the 5% category, it might pull you under 20% or with some micro-niches it might pull you under 10%. If you layer that kind of a niche practice with some kind of a software solution that services the niche, and you support clients in the implementation and use of that software solution, now you have specialized knowledge. Now you can add unique differentiated value, and not only can you increase your value proposition for your clients, you can price according to that increase of value without price pressure coming from your peers, aka the market.
Some great examples of that would be in the construction industry. You embrace not just a construction industry niche or even a micro-niche of the short term contractors - basement remodels, deck rebuilds, bathroom add-ons or something like that, that's a booming business right now because people are adding on to their homes rather than building new ones, and have been for the last five years - but you also embrace a product like Knowify.
And there are less than 5% of your peers who've mastered that product. You can allow your short term contractors to have mobile automation in the field, global tracking of where their people are working, anywhere where they have a smart device and a command center back at their office where they can monitor who's on what job sites, who's gone to lunch, where they can redeploy their people in the field and the completion levels, the status of completion of their jobs, as well as get extremely powerful job cost reports for QuickBooks Online. QuickBooks Online desperately needs somebody to help them from the outside, one of their developers, to bring those reports into that platform.
That's just one example, you could pick non-profit, you could pick legal. There's a great new legal solution called Firm Manager by LexisNexis that will do much the same as with Knowify, only in that category and you would have knowledge not shared by more than 5% of your peers. The mixture of niche and the mixture of innovation technology will create for you a differentiated and unique offering that increases value for your clients, allows you to value price - more on that on the next podcast episode - and transfers you into the realm of the epic.
Here is a quick summary. The epic pillars we talked about today are - be purpose driven, have powerful infrastructure systems and processes, empower your teams, be proactive, and be unique and differentiated. I'm going to cover five additional pillars of the epic practice in Part 3 of this podcast series coming up in just a few weeks.
For all of you who tuned in to today's podcast I want you to know you can learn more about Woodard and also other episodes in this podcast series and our annual conference called Scaling New Heights at Woodard.com. As always we encourage you to stay tuned, stay connected, never stop learning and scale new heights.