Date: Monday October 28, 2013
Phoenix, AZ

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Once the shock was lifted from everyone’s faces, we began to peel back what this really means.  Not only did I love what this managing partner said, you can be sure his team loved the comment as well.  And while we knew it wouldn’t necessarily be categorized in the near-term objectives, it was definitely an objective we wanted to capture for several years down the road.

If you’re still reading, some of your traditional industry colleagues might call you crazy as I’m sure they’re thinking that of me and this project team / managing partner.  Let them think it’s a crazy thought, and they can continue to live in the past.  The thing is, we don’t think this is a crazy concept.  We believe it is something that can be achieved, and let’s explain why.

First, most of my project teams in the past year have identified staff morale (staff meaning employees at all levels, not just staff) as a major issue facing the industry and an objective of the Lean project is to help improve morale.  People are extremely “burnt out”.  Setting up more effective processes that save time and allow individuals to work smarter is a  must.  This goal of 8-hour days for a majority of busy season falls in line with improved morale.  Second, this firm is leading from the front.  They are not satisfied with status-quo; things like copying other firm’s best practices, giving lip service to work-life balance but not really making the changes necessary, and having a dysfunctional leadership team are not part of this firm’s DNA.  They will do what it takes, from the managing partner on down, to ensure they live by their beliefs and achieve their objectives.  Third, this firm is a solid believer in Lean principles and the gains they can achieve.  They understand the beauty in simplicity and the buried treasure (e.g. waste) that exists in many traditional compliance processes that can be removed.  So they are ripe to achieve a goal of hitting 8-hour busy season days for a majority of days during busy season…without sacrificing revenue or quality.  Lastly, think about what this does for individual growth and talent retention.  Some of this firm’s top staff and seniors were on this project team.  Do you think they’ll be more committed to this firm than others in the industry are committed to their firm?  You betcha.  And do you think they’ll use this as a recruiting tool to get more of the best and brightest? Yes, again.

This managing partner, who serves as the team’s Lean champion, laid down the ultimate challenge.  And his firm is better off for it.  We need more like him.  If we never challenge the paradigms we’ve always lived within, we’re not growing.  He challenged one of the ultimate paradigms and I thank him for it.

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Date: Thursday June 20, 2013
Time: 10:30am to 12pm (noon)
Detroit, MI

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1)      identifying how these ideas actually help solve problems and lead to improvements within your organization and

2)      strategically deploying these new ideas and getting buy in to actually implement them.

That’s right – there’s a problem with sharing best practices and thinking these are the long-awaited silver bullets you’ve been missing.  How does it fit within your organization?  How does it fit your culture or personnel?  Is it solving an actual problem you have or does it just add more clutter to an already convoluted process that you have?  Unfortunately, I see many firms fail to answer these questions before implementing these best practices.  And the lackluster results and lack of firm-wide adoption of these ideas speak for itself.  Then, we repeat the cycle next year.

Following a proven road map.  This is where the structured and formal approach of the Lean Six Sigma D-M-A-I-C model (Define, Measure, Analyze, Improve and Control) can be the differentiator and catalyst your organization needs.  It’s not that the best practices are wrong.  What is crucial, however, is that you identify which ideas and best practices will actually solve problems your organization is currently facing.  Not just on paper but in reality.  The ideas that, when strategically inserted into your opportunity areas, will lead to optimal results.

This model is quite simple, actually.  You know where to focus your improvement ideas by defining process objectives, measuring the current state of your process, and analyzing your present situation to identify deficiencies.  Instead of seeming scattered with your changes, you appear focused and can build a case for change. And you are able to explain to those who need to buy in the ever crucial “why”   and how certain ideas and best practices actually solve real-world issues.  This makes the Control phase (aka “Buy In”) much smoother.

Firms and organizations that use this approach to process improvement report and realize far greater productive results compared to organizations only concerned with accumulating and deploying best practices in a shotgun manner.  It’s a much more structured and proven approach.

Are you engaged in creating results?  I like to say that the ultimate best practice is following the DMAIC road map to select and deploy individual best practices.  Does it take time and effort?  Yes.  Does it require developing strategies around buy-in and thinking ahead?  Yes.  Do you need to build a case for change?  Yes.  You can spend your time now building a culture around continually improving and optimizing process performance, which better serves clients.  Or you can take the easy way out and force feed best practices into your firm in a historically scattered approach.  This will cost you far more – multiples of the DMAIC road map investment – year after year.  And if you’re not careful you’ll repeat this vicious cycle next year with more one-size fits all best practices.  It’s not the best practice that matters – it’s how a solution can be strategically inserted into your process at the right spots that will drive results.

“The definition of insanity is doing the same thing over and over again and expecting different results.” – Albert Einstein

If your firm has struggled deploying best practices and has used one-size fits all ideas in the past, why don’t you try something different this year?  The ultimate best practice.  It’s about results.

Dustin Hostetler

Lean Six Sigma Master Black Belt

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I believe there are several reasons for this trend.  First, traditional tax and assurance processes seem to be treated and viewed more and more like a commodity.  This is partly our fault for not properly communicating value but also a market perception of the CPA profession in general.  And when services become increasingly viewed as a commodity, it’s no wonder many firms are complaining about fee pressure on traditional services.

Another reason is related to the first.  As firms look to continue to grow the top line, they’re looking outside traditional service areas.  A huge distribution channel already exists within your firm in the form of your current clients and so it’s natural to look into what additional ‘value-added’ services can we deliver through this distribution channel.

Lastly, I’m seeing a lot of what I’ll classify as early to moderate ‘burnout’ in many CPAs and professionals – ahead of the normal wear and tear.  The pressure of busy season after busy season of more and more compliance work seems to be taking a toll.  Top performers are especially looking for new and innovative ways to interact with their clients, delivering new services that truly add value.  We all want to feel like we’re adding value.

Personally, I’m seeing a big increase this year in firms looking to send their rising leaders and partners to our Lean Green Belt training certification classes.  Whether on-site at a firm training a handful or more individuals at one time to begin a consulting niche, or more on an individual basis through our group classes through Ohio State, it’s such a pleasure to see the message finally hitting home that we’ve been trying to get out in the past several years.  Lean Six Sigma is a wonderful tool set and methodology to learn, not only for your firm internally to improve processes but as a tool to use for your firm’s clients and consulting needs as well.

If this describes where you want to be taking your firm, I encourage you to explore more about how Lean training and certification can benefit you.

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This is partly understandable because we’ve all been trained and conditioned to think the busier people look the more efficient and fast they’re working.  It just has to be, right?  If I ask someone to work harder and faster and I see them busy working they are efficient, right?  Not necessarily.

It may seem a bit counterintuitive, but efficiency is not about how fast your people seem to be moving.  Efficiency is not about how much effort people are putting in.  Being truly efficient comes with an understanding it’s about what we’re getting done, what we’re finishing up and delivering.  It’s about what we’re actually accomplishing.  It’s about results.

All of my clients are familiar with the “Lego Exercise” that we do to help drive this point home during lean training.  Even years after performing this training and demonstration, they still refer back to examples in this exercise and how the concepts continuously apply.  We show how you can have everyone nearly 100% busy and utilized, working as fast and hard as they can, and still not performing at our efficiency goals.  Yet, by making a few lean changes to the process, this constant state of busyness can go away into a smoother form of process efficiency and actually get stuff done.  Deliver results.  Complete tasks and projects.  Isn’t that what efficiency is all about?

So the next time you have the urge to focus on “working fast and hard” to increase efficiency, maybe it’s time you take a step back and understand that doesn’t drive efficiency.  Work smarter and set your people and processes up for success.  Efficiency is about focusing on completion and accomplishments.

Are you measuring efficiency wrong?

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The emergence of previously unheralded superstars and talent that elevate their teams to new levels of success and productivity.

This March, and into April, we saw the emergence of rising superstars in college basketball like Luke Hancock (Louisville), LaQuinton Ross (Ohio State), Mitch McGary (Michigan), and everyone’s favorite Cinderella story of Florida Gulf Coast University and tournament star Sherwood Brown.  Each of these players elevated their game to previously unseen levels and led their teams to impressive deep runs in the tournament.  And in Luke Hancock’s case the NCAA Championship.

Not only did these players increase their individual performances and key stats like points and rebounds per game, but they also added a new dynamic to each squad that made their teams much more difficult to beat.  But make no mistake; their emergence wasn’t just an accident.  It entailed months of practice, development, coaching and confidence building that led to a break-out culmination when their teams needed them the most.

How can we take the lessons from successful NCAA basketball coaches and teams and apply them to a CPA firm?

A Culture of Learning and Development.  First and foremost, successful firms realize a culture of learning and development is crucial in the attraction, development and retention of key employees.  As I stated above, learning and development doesn’t happen by accident.  But too often I see firms that view learning and development as a complete afterthought and blindly hope that they have the necessary talent and talent development to succeed in their firms and with their clients.

Learning and development need to not only be processes within your firm, they must be visible processes that are viewed as important and are readily accepted within the culture.  I see the following four traits in high-performing firms that put a strong emphasis on learning and development:

• Engaged Partners – Partners that care, understand the importance of being engaged and are involved in the development of their teams at every level.  They lead by example and, more often than not, most partners in these high-performing firms take significant time and find tremendous value in mentoring and developing the next generation.
• Collaborative Hands-On Training – The most successful worldwide organizations have training programs that focus on the following four-step process:  Watch an expert, try with an expert helping, try with an expert immediately available to answer questions, try on your own.  What I see in most CPA firms is the exact opposite and what I call “throw them to the sharks” and “pray for their survival.”  While some of you may have been “trained” this way back in the day and turned out okay, it significantly prolongs learning and development and is less effective with the next generation.
• Trust through Leveraging – Another common problem in middle of the road and lower performing firms is a lack of trust and delegation of clients and workloads at various levels.  It’s always easier in the short-term to say, “I know this client and can get it done quickly.”  But in the long-run what is that really accomplishing for the firm?  It’s no wonder when our senior partners leave firms we struggle to retain some of their clients.
• Accepting of Mistakes – Part of a learning and development culture is an understanding that there are going to be bumps along the way.  The process won’t work perfectly.  People will make mistakes.  But those same people will learn tremendously from those mistakes in an accepting culture that places value on personal feedback instead of remote feedback. Don’t underestimate the value and importance of collaborative review and feedback.

Are you a Final Four Caliber Firm?  Now that busy season is over and you are assessing where you stand and where you need to improve, don’t forget about assessing both your processes and your learning and development culture.  They go hand-in-hand.  Your process must actively support your learning and development culture, while taking into account the four key traits above.  So whether you’re looking to improve your tax or assurance processes, it is essential to look at how well they support and build upon learning and development.  Efficiency and learning don’t have to be mutually exclusive – that’s one of the tremendous joys I get out of consulting with firms in both of these areas through Lean.

Here’s my challenge to you and your firm.  It might be easier to move on business as usual year after year and not address your processes or how learning and development fit into those processes.  You can continue to hoard work, embrace the same as last year mentality at every turn, or fail to leverage and develop future leaders.  And you will continue to get the same sub-par results.  Instead, why don’t we take a page from some of the more successful college basketball programs?  Let’s build our processes around the idea of getting our players minutes and experience in January and February, even if it might cost us a game or two along the way, so that way we are peaking and developing our strongest team come March?  That’s what the fans remember and you can be assured that’s what your clients will remember.

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