I have been a student observing this industry for over 40 years and progress on developing a strategic advantage has been very slow, in part, because there has been little pressure to change. It has been more about fiddling at the edges rather than transformation. In recent months, or perhaps it has only been recently that I have noticed it, there seems to be some acceleration in some parts of the profession.
I have always thought that there were two pressing needs in the typical accounting firm, firstly to develop a production culture with regard to producing compliance reports, and secondly, to introduce value-added services to help clients generate more profit and growth. I have to say the success in both areas has been limited but more effort has been invested in the value added services and sales process.
I know believe it is difficult to do either strategy, and virtually impossible to do a good job of both. The main reason for this is the culture and the processes for production is so different to that required for value-added services. I have observed in recent months an increased amount of mergers (really take-overs) as good firms try to get bigger. The challenge for firms on the acquisition path is to have the leadership needed to manage something bigger. By leadership I don't mean just leaders, I mean the whole leadership structure and processes.
Having said that, the leaders that come front of mind doing this are very capable people, I worry about the (lack of) depth behind them. If they get it wrong divesting will fix it so hopefully no permanent damage done. The real cost will be the loss of confidence to try it again! Then there is the issue of will they step up the production culture or just try harder doing more work using the same inefficient processes they always have?
I think there is a huge opportunity for the smaller firms, I am thinking less than 20 Partners, to become a boutique full-service firm. My vision is $1 of value-added fees for every $1 of compliance fees (for a start at least). What needs to change? Firstly, the majority of Partners need to sign of for it. Secondly, the skills and confidence in delivering value-added services needs a massive step-change. Then we need a better sales process and pipeline. We can throw away time sheets. Sounds pretty exciting to me.
Sure these smaller firm should not be able to match the production costs of the big firms but that assumes the big firms can do it right and I'm not confident about that. The key point is the value-added services that will be the magnet that attracts and retains good clients so the accounting firm can still make a margin on compliance.
Who will have the courage to take this one rather than fiddling at the edges? If I owned an accounting firm, a boutique, full-service, strategy sounds exciting, and, of most importance significant value to the clients.
Wednesday, October 5, 2011
Wednesday, July 27, 2011
Change Management
In September, at the Atlanta Mindshop Facilitator meeting, I will release an innovative new model on change management. I have read extensively on this topic and was not surprised to find that the failure rate of change management programs was around 70%. I decided to review all the (peer-reviewed) literature that has been published on change management. After an investment of around 200 hours, I came to the conclusion that there was a gap in the research, no-one had come up with a model that could be used to determine the "best" way to implement change in each specific circumstance.
The research helped identify the key factors (constructs) that impact on change management, and I selected three to build a matrix; leadership style, change readiness, and the level of investment available. The leadership options are; autocratic, democratic, and transformational, so start thinking about your own style. The change readiness factor is about how well the organization has addressed issues such as; stakeholders beliefs, attitudes, and intentions, and capability to implement the change. Again you need to consider where your organization is in terms of change readiness. The investment level is impacted by the cost of activities such as training, consultants, coaching, kpi measurement, and time available.
I then used the matrix to select which of three change implementation processes were the best for each combination of the three constructs. For example, an organization with a transformational leader, that is at a high level of change readiness, and has a significant budget available to invest in the change initiative, is best to use an "empowered" approach. My paper specifies exactly what should be in this approach, and it includes initiatives such as; a balanced score card measurement, a dedicated web-site for the program, and a full-time coordinator of the program. Similar "menus" are specified for the other two approaches, "directed" and "supported".
All the aspects of the Mindshop Change Management Matrix (CMM) are supported by scientific research which makes this model unique. If you are interested in reading the justification for the model and its content, let me know, and I'll email you the paper. I will be interested in your feedback.
The research helped identify the key factors (constructs) that impact on change management, and I selected three to build a matrix; leadership style, change readiness, and the level of investment available. The leadership options are; autocratic, democratic, and transformational, so start thinking about your own style. The change readiness factor is about how well the organization has addressed issues such as; stakeholders beliefs, attitudes, and intentions, and capability to implement the change. Again you need to consider where your organization is in terms of change readiness. The investment level is impacted by the cost of activities such as training, consultants, coaching, kpi measurement, and time available.
I then used the matrix to select which of three change implementation processes were the best for each combination of the three constructs. For example, an organization with a transformational leader, that is at a high level of change readiness, and has a significant budget available to invest in the change initiative, is best to use an "empowered" approach. My paper specifies exactly what should be in this approach, and it includes initiatives such as; a balanced score card measurement, a dedicated web-site for the program, and a full-time coordinator of the program. Similar "menus" are specified for the other two approaches, "directed" and "supported".
All the aspects of the Mindshop Change Management Matrix (CMM) are supported by scientific research which makes this model unique. If you are interested in reading the justification for the model and its content, let me know, and I'll email you the paper. I will be interested in your feedback.
Monday, July 4, 2011
Personal Brand (you already have one, is it the one you want?)
Your personal brand is there whether you like it or not. You have a choice to just accept the personal brand that has evolved or you can take control of your brand. The benefits of controlling your brand include, better and targeted referrals, a reputation to be proud of, and being first in other people’s minds when they have an problem they need help with. You can control what you are known for.
What are you known for?
What are you known for at work?
If you are not sure, or even you don't like, what you are known for, then you probably should put some thought into your personal brand. Before we get into any specifics, let's think about what a brand is and then we can consider what this means for you and what benefits the right brand will create for you. A brand like Ford will mean different things to different people as it is a global brand known to many people in different countries. For me, it means conservative, reasonable quality, good value for money, and American-centric. What does it mean to you? What is the Ford management team trying to be known for?
How does Ford develop it's brand? They sponsor things, they advertise on television/print media/radio, and sponsor events to name just a few brand activities. The point is that if they left it to others, they may end up with a brand not to their liking. This lesson is also relevant to you. Why don’t you try applying the below 3 Step process to you:
Step 1: Determine what you ARE known for Step 2: Define what you WANT to be known for Step 3: Take some ACTION to achieve or maintain your personal brand
For the first step, ask yourself “what are you known for today?” If you are not sure I suggest that you ask people around you questions such as, "what do people say about me?" or "what do people think my strengths/weaknesses are?" This first step is the hardest step to take and will then become easier.
The next question to consider is, "what do I want to be known for?" if you are thinking that you would like to be known for always doing what you say, for being innovative, and for being very knowledgeable about customer service, then that's what you write down.
We are already at step three! Compare your results from steps one and two. Do they align? Are you already doing well on something? If, for example, you are seen as being innovative, but not as an expert in customer service then do something about it. You could google "customer service" and look for some innovative articles that you could email to other people. If you find more innovative articles on other topics, by all means save them, but for now just send out the customer service articles. You may even offer to speak on customer service during your company "lunch and learn" sessions. Why not offer to coach others in customer service?
Following these three simple steps will start you working on your personal brand. By now you have probably got some ideas for developing your own brand. If you do let's keep going. Why not start a blog on the area that you want to be known for? There is no end to what you can do if you keep working on it and not leave it to chance. The key is to invest the time into a personal branding activity every month and you will find you will become known for something very quickly.
One final thought on your work personal brand is that you may find there are two dimensions to your brand; an internal work brand, and the external work brand. You probably need to work on both, but you should find that the activities will be very similar, if not exactly the same. Good luck with developing your brand.
Sunday, April 24, 2011
Competitive Advantage
For decades I have been pursuing a sustainable competitive advantage around issues such as value, excellence, and customer service. I no longer believe that these issues are sustainable. For example, in an accounting firm, gone are the days where the competitive advantage is around being a full-service firm or client service levels. If I was running a CA or CPA firm I would have "we will win by being the best place to work" as our competitive advantage. This advantage recognizes how important it is to attract and retain the best people. It will focus on issues such as life-long learning, fast-tracking careers, and even, having fun at work. Building a community around the firm is the key.
If I was a manufacturing firm I would have, "we will win by being the best business to work with", in this case I am thinking of the customers, the suppliers, and the employees. The issues this time are around, ease of working with, exceeding expectations, understanding the specific needs, and anticipating needs. For employees that translates into flexibility of work, use of technology, and leadership.
For an organization such as Mindshop, the emerging competitive advantage is likely to be, "we will win by best creating a sense of family at work". The issues driven by the sustainable competitive advantage statement include, communication, rate of contact, trust, and mutual support. It is the values such as trust and support that are the key to building and maintaining a family culture. The challenge is how to create this culture. I suggest that selecting clients with similar values will continue to be essential. Building trust with our clients so that they will share honestly with us their fears and concerns is the step before being able to effectively support the clients.It also creates a need to deepen our skills in a wide range of hard issues (strategy, diagnostics, training, problem solving) and soft issues (confidence, motivation, behavior modification).
The "big picture" issues that I see for Mindshop in 2011/12 include, achieving step-change, and increased collaboration. The step-change will require doing different things, new structures, basically doing a pareto analysis on ourselves and throwing out the 80% of the "trivial many" to enable focus on the 20% "vital few". If the step-change is structural, then the collaboration is cultural. We need both. The collaboration starts with how we coach and support our clients, how we run our meetings and conferences, and includes increased collaboration between clients.
I predict that in 2011/12 we will build a stronger Mindshop family. As the diffusion of innovation model specifies, initially around 16% of our clients will "get it", followed by the next 34%, and ultimately another 34%. This path will not be easy, but that's life, anything of value is usually hard.
If I was a manufacturing firm I would have, "we will win by being the best business to work with", in this case I am thinking of the customers, the suppliers, and the employees. The issues this time are around, ease of working with, exceeding expectations, understanding the specific needs, and anticipating needs. For employees that translates into flexibility of work, use of technology, and leadership.
For an organization such as Mindshop, the emerging competitive advantage is likely to be, "we will win by best creating a sense of family at work". The issues driven by the sustainable competitive advantage statement include, communication, rate of contact, trust, and mutual support. It is the values such as trust and support that are the key to building and maintaining a family culture. The challenge is how to create this culture. I suggest that selecting clients with similar values will continue to be essential. Building trust with our clients so that they will share honestly with us their fears and concerns is the step before being able to effectively support the clients.It also creates a need to deepen our skills in a wide range of hard issues (strategy, diagnostics, training, problem solving) and soft issues (confidence, motivation, behavior modification).
The "big picture" issues that I see for Mindshop in 2011/12 include, achieving step-change, and increased collaboration. The step-change will require doing different things, new structures, basically doing a pareto analysis on ourselves and throwing out the 80% of the "trivial many" to enable focus on the 20% "vital few". If the step-change is structural, then the collaboration is cultural. We need both. The collaboration starts with how we coach and support our clients, how we run our meetings and conferences, and includes increased collaboration between clients.
I predict that in 2011/12 we will build a stronger Mindshop family. As the diffusion of innovation model specifies, initially around 16% of our clients will "get it", followed by the next 34%, and ultimately another 34%. This path will not be easy, but that's life, anything of value is usually hard.
Monday, March 21, 2011
Transformational versus Transactional Leadership
In these challenging (and exciting) times it appears that most leaders are playing safe and adopting a transactional style of leadership. By that I mean they focus on being technically good in areas such as their knowledge of the business, developing strategies, maintaining their skills, and generally working hard. The bad news is that 2011 is about leverage if you really want to be competitive, and transactional leadership will only drive more of the same, let's call it a five percent improvement on 2010's results.
A transformational leader behaves in a way that literally "transforms" themselves and their business (and their business results), achieving a 25 percent step change, rather than more of the same. Studies on transformational leadership have identified three things that transformational leaders do well, they increase their people's vision for the business and their self-belief in their competency (technically called self-efficacy), they facilitate their team members' social identification with the group, and they link the work values with the employees' values (Bono & Judge, 2003).
To improve the self-efficacy you can link the organizational vision directly to that of each person by showing them how they can benefit in where the company wants to go. Linked to that you need to clearly demonstrate how the person will gain the skills, and be supported, so that they cannot fail to achieve their part of the vision. Do not assume that they will work this out for themselves.
Building social identification is a hot topic today, but this is more than Facebook, or Twitter. The transformational leader breaks down organizational silos, encourages social interaction, and takes a personal interest in all their people. Simple things like awards, logos, newsletters, and praise help build the social collateral.
Do you have your company values clearly defined and communicated? Mindshop has five values, continuous improvement, community contribution, best practice, value to others, and fun. You need to encourage your people to adopt and embrace your values so that there is a clear link between the two value sets.
The symptoms of an organization with transformational leadership include, confident staff, a pride in belonging to the company, a commitment to be the best, and a burning desire to make a difference. Does that describe your organization? If not, perhaps you have too much emphasis on transactions and not enough transformation?
A transformational leader behaves in a way that literally "transforms" themselves and their business (and their business results), achieving a 25 percent step change, rather than more of the same. Studies on transformational leadership have identified three things that transformational leaders do well, they increase their people's vision for the business and their self-belief in their competency (technically called self-efficacy), they facilitate their team members' social identification with the group, and they link the work values with the employees' values (Bono & Judge, 2003).
To improve the self-efficacy you can link the organizational vision directly to that of each person by showing them how they can benefit in where the company wants to go. Linked to that you need to clearly demonstrate how the person will gain the skills, and be supported, so that they cannot fail to achieve their part of the vision. Do not assume that they will work this out for themselves.
Building social identification is a hot topic today, but this is more than Facebook, or Twitter. The transformational leader breaks down organizational silos, encourages social interaction, and takes a personal interest in all their people. Simple things like awards, logos, newsletters, and praise help build the social collateral.
Do you have your company values clearly defined and communicated? Mindshop has five values, continuous improvement, community contribution, best practice, value to others, and fun. You need to encourage your people to adopt and embrace your values so that there is a clear link between the two value sets.
The symptoms of an organization with transformational leadership include, confident staff, a pride in belonging to the company, a commitment to be the best, and a burning desire to make a difference. Does that describe your organization? If not, perhaps you have too much emphasis on transactions and not enough transformation?
Monday, January 17, 2011
The Benefit of Adversity
Whilst not wishing people to have to suffer through adversity like the current floods in Australia, it has been interesting to observe people's reaction to what has happened. The Queensland government on the whole reacted very professionally to the deaths and the flood damage in that State, holding press conferences every two hours, replying immediately to rumours and poor information, and firmly taking charge. The most amazing thing was how people volunteered to help prepare for the flood, and to clean up the mess as the water receded.
People were facing the return to their home knowing there was no power, inches of mud and slime over everything they owned, and then opened their door to find 20 people armed with shovels, buckets, and mops ready to help. Within hours the carpets, in some cases even the walls, were out on the footpath, and the house scrubbed clean. Tens of thousands of volunteers were bussed into the flood areas so they could help out.
It was also pleasing to note that looting was kept to a minimum, some, I assume professional thieves, tried it and were quickly jailed. There is up to 10 years jail for looting in a natural disaster, so I hope the book gets thrown at these people. At the time of writing only 14 arrests have been made, showing how the majority of people in our community are honest and empathetic. Already the media is moving to allocate blame for what happened, why can't we just accept there is risk in every aspect of life and learning from experience does not mean blaming people? My house had minor storm damage before Christmas and we finally got everything repaired yesterday, our experience was nothing compared to most and hopefully my insurance will cover the hard costs in any case.
The lesson in all this is that "value to others" (VTO) is alive and well in Australia, we are a true community, big enough to have a unique culture, and small enough to each be important and respected. We need reminding that we are truly a "lucky country" and these floods have indirectly done that.
People were facing the return to their home knowing there was no power, inches of mud and slime over everything they owned, and then opened their door to find 20 people armed with shovels, buckets, and mops ready to help. Within hours the carpets, in some cases even the walls, were out on the footpath, and the house scrubbed clean. Tens of thousands of volunteers were bussed into the flood areas so they could help out.
It was also pleasing to note that looting was kept to a minimum, some, I assume professional thieves, tried it and were quickly jailed. There is up to 10 years jail for looting in a natural disaster, so I hope the book gets thrown at these people. At the time of writing only 14 arrests have been made, showing how the majority of people in our community are honest and empathetic. Already the media is moving to allocate blame for what happened, why can't we just accept there is risk in every aspect of life and learning from experience does not mean blaming people? My house had minor storm damage before Christmas and we finally got everything repaired yesterday, our experience was nothing compared to most and hopefully my insurance will cover the hard costs in any case.
The lesson in all this is that "value to others" (VTO) is alive and well in Australia, we are a true community, big enough to have a unique culture, and small enough to each be important and respected. We need reminding that we are truly a "lucky country" and these floods have indirectly done that.
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