Growth Tips For CFOs - Case Study

If you can take steady, actionable steps towards a really system, systemized organization. Right. That then is moving in the direction of the strategy. You're leaps and bounds ahead of everyone else in your marketplace.

Hey, it's Dave from Systemology. I'm here with Jared Sinegger from Bravura and we're going to be talking about his systems journey. I love to shine a light on business owners, see how they've done it and hopefully inspire some others. So maybe just to start, Jared, if you could introduce yourself, tell us a little bit about what you and your business do and then we'll kind of go from there. Yeah.

David, thank you very much for having me on. I work with business owners that struggle with performance, decision making and risk in their businesses. Through the businesses structure, system processes and people, I help those businesses become industry leaders.

Yes. So you're from what I could have a look at either historically or it's kind of like if we were to put a title on it. Kind of like a cfo.

Yeah. I mean financial strategy is the way that I like to look at it when CFOs, it's, I mean, it's a whole conversation, separate conversation. But typically they're meant to be strategic. They're meant to take the inputs or the resources of the business and execute on the strategic plan. I have to say though, day to day out there in the, in the world of business, I would say most CFOs are probably more just glorified internal accounts. They're really great at the control element of the role, but not so great at the strategic element. So I hate putting myself in that bucket sometimes. But ultimately, yes, like a satellite CFO that is really good at the strategic stuff that is there to realize a vision.

Yeah, that makes sense. Which makes me think also you're going to have a little bit of an affinity with systems because I know the finance industry in particular is driven by process. There is a way of doing things and a lot of finance people just get this message straight away. Yeah, absolutely.

I mean, I wouldn't, I wouldn't say I'm phenomenal at systems, honestly. There's definitely people that are, that are much better at it than me. And I'd have to say maybe those CFO types where they're really great at the control element and the governance element, they would be on that end of the spectrum. Whereas, you know, being slightly more strategic minded, I do think a little bit more big picture and the ideas are a little bit larger in the sense that I. The systems in the, and the process to implement the strategy, I tend to not get too deep into, but I recognize that they're absolutely a necessary element to any business successfully being able to execute on a strategic plan. I mean, from, from the get go, when you talk about developing strategic plans, the process that you go through to develop it. Right. Needs structure in itself. Right. So even when you're talking about great big ideas and the future and where the business is going and things like that, taking a structured approach, that process is ultimately going to yield dividends in terms of the likelihood of executing successfully on the strategic plan. So yeah, I'm all about it.

Yes. And it sounds like you've grown a little bit beyond just like the typical like consultant as well. Like you've got some team around you.

Yeah, I mean, again, that's, it's, it's really hard to define what does a consultant do. I mean, that the label is thrown around quite a lot. And yes, there's a team of us that, that, that do what we do. I'm, I'm the, the face of it. But ultimately, yeah, there's a whole bunch of us that have to deliver on our methodology to create those industry ladies that we want to work with.

When you've built the business, did you build the idea of systems and process into it from day dot, or is it something that you kind of have started to engineer after the fact?

No, look, I mean, it's coming from the like typical accounting, tax advisory, business services background. I had a great awareness of it and, and there was always elements of what we did day to day that were always systemized. Right. And, and like you said, that natural affinity being the role that we play would have that. However, when, when I kind of took the Bravura label and turned it into what it is today, I recognized that we needed more than just what we'd been doing previously. And that also helped from a differentiation perspective in the marketplace in that, I mean, at its core really, I'm a chartered accountant, right. And if I were to tell someone that I'm a chartered accountant, they instantly think accounts and tax returns. So to redefine that perception, we needed a different approach. And that different approach came through the methodology, which then meant that, okay, if we've got, got a defined methodology, a system to deliver our products and services, then we could articulate that differently to the market and then ultimately price ourselves, differentiate ourselves from, from all those others out there.

Yeah, I like that. And that kind of fits in well with the idea of the critical client flow in systemology as like a. Effectively the starting point, trying to figure out, well, what is that core product or service and then the systems and everything hang off that chassis?

Absolutely, absolutely, yeah.

Were there any other things that kind of stood out for you when you worked through Systemology? Either either that reaffirmed your model of the world and the way that you think about business or if there are any kind of new insights where you just like. I hadn't quite thought of it that way.

Look, I mean the structure, the structure itself, like the fact that there is a program or a process to follow to systemize your business. Right. That, that in itself give, I mean, I think in terms of risk and variability and things like that. Like if you, if you want to, if you want to create industry leaders. Right. Not only do they need to have a well defined segment that they operate in, a great product. Right. Team and all that kind of stuff, but they need to deliver replicable results every single time. Right?

Yeah.

So how do you, how do you approach that with, with a client or even in my own business? Well, you've got to start with a system for creating the systems itself. So you're absolutely right. It's, it's, it's a idea or methodology and then you build off of that. What Systemology did was just gave me a process to go, okay, this is what, this is what we do. Right. And how do we move, build back from that to create an organization that can create those replicable results for not only ourselves, but then to pass on to our clients as well?

Yeah. As you roll these ideas out, was there any form of resistance or anything that came from the team or were they quite receptive to the idea?

I would, I would have to say that, I mean working with, with a bunch of accountants or financially minded people, analysts and things like that, they do, they do love structure, but they're still human beings. Right. And human beings are all different and different behaviors, personalities and all that kind of stuff. So that is always going to be, I think a natural resistance point. I do think I probably have it better than most. My partner, she's self employed clients, their businesses, I see a lot more resistance. You know, quite often you have to change out a few of the team to really get the team right. To execute on a vision and things like that. But that is definitely, I mean if there was a secret weapon for that in itself beyond, you know, the standard things and making sure you've got engagement and leading from the front and things like that, I think we'd all be a lot More successful if that was something to measure by.

Yes, it's funny you say that. That's the bit I'm trying to look for, I'm trying to find. It's like the, the Holy Grail. Absolutely. The, the closest thing I've got, which I'm exploring more and more on and having a look. It's really centers around the idea of the systems champion. A lot of the clients that I've worked with that have really smashed it out of the park have. Oftentimes it's a junior person. Almost like sometimes, like I've seen it in the accounting space where it's the junior accountant who has, you know, gone to uni. They're just starting in the industry. They're fresh, they're young, they're hungry, they still have so much to learn. And giving them the gift of being a systems champion to extract ideas from knowledgeable team members and basically get that IP out of the brain and codify it and then share it with the team. I'm finding that's at the moment. There's still work there. It's not like a push button Holy Grail, but it's definitely as close as I've got. I don't know if you have any.

No, I really like the, the sound of that approach. I mean, the fact that they're coming in as, as a clean slate means that there's. You don't have to. All that behavioral change that you would normally do by getting someone, you know, senior and really established in a business who, who has all these preconceptions or, or just learn behaviors that you'd have to relearn, cancel whatever the case may be. Right. Getting someone that's completely green. Right. It's now your role to do this. They can also take probably a new perspective. I mean, there's the accounting industry. There's been a significant amount of technological change in the last 10 to 15 years. Right. So these days we're leveraging more and more and more to younger team members because they just understand it more than senior team members. So especially in this industry, I'm not sure what it'd be like thinking on the fly here, what it'd be like in other industries. But certainly in our industry, getting someone junior, clean slate, you know, different, fresh perspective on everything would, would potentially yield fantastic results.

And I feel like it's such a magnificent gift that you could give that new team member as well, because a lot of the, you know, as Michael Gerber used to talk about the idea of the technician who has the entrepreneurial seizure where they know how to do the thing. They are, let's say the accountant and they know how to do good accounting. But then they realize running an accounting business is still very different than just the accounting piece. And I think yeah, teaching that to someone junior earlier on would yeah be a little bit of a game changer. I, I had the good fortune. It was actually literally just last week I had a speaking engagement to a group of 160 accountants up on the Gold coast. And it's interesting to hear how your industry is changing significantly with a lot of particularly back office work, moving offshore and you know, you still have kind of front, but a lot of the back office stuff which also lends itself to be very process driven to try and free up your highest skilled people like you know yourself to really think about strategy, which is where you add the most value. But all of the other stuff which is just wax on, wax off, follow a process really in your industry is getting, you know, turned on its head. I don't know if you're seeing that.

No, absolutely, absolutely. I mean even in the structure of Bravura has as a sister business that is, is very traditional in its, in its size and approach. Middle market accounting and tax tax advisory firm. When, when I first fresh grad sort of thing came into the world of accounting, there would have been, I would say six to seven lower level team members to each manager. Now you'd have three. Right. So there's, there's potentially three to four roles that were very data, data entry, heavy reconciliation and things like that that have been completely automated. So you're Talking about potentially 20 to 30% of your workforce in just 10 years where roles have changed just purely as an advent of automation.

Yeah, and I think layer on top, like we're seeing a few disruptive technologies roll out. We're probably still early days. Finance has got a bit of it early on. But the AI industry which is just analysis of data like it's an absolute beast at that stuff. So I feel like there's probably more disruption yet to come.

I completely agree. I mean from a, from a strategy perspective, AI presents us with a great opportunity for capitalizing more on understanding data. I would say that at the moment maybe people in the digital marketing space are most concerned about how quickly the change is occurring. I mean that was us 10 years ago in a lot of ways. I don't think a lot of the negative that surrounds AI, I don't think it is bad as people make it out to be or anything like that, but there's definitely opportunities for those that. And to bring it back to a systems element. Right. Even just down to the behaviors that you need or the reliance on individuals to write and set systems within your business. You can leverage AI to do all that kind of stuff to just lower the barrier to acceptance and lower the barrier to just to roll out and get it done faster. Yes.

Yeah. There's, we're seeing it definitely when it comes to that documentation side of things. One thing that I'm realizing more and more that AI doesn't tend to like. It doesn't make an average team member a super person. It makes a super person even more of a super person because you kind of it, it augments what's already working because you almost need to know what to ask and what good looks like. So I think if smart people use the tool that can make them get their same output much more efficiently. And that for me was a little bit of a shift because I, you know, there's all this talk like you said, that could be, oh, you know, the robots are coming, be careful, you know, the, it's going to take jobs and things like that. I think for those that embrace just makes them better at what they do.

Agreed. It's like the final maybe 15, 20% that you can really get so much more out of. But when a lot of players in the marketplace are only working to say 60% of their of their efficiency, adding another 20% can make a really material change to their business. Especially when you consider, I mean from a financial perspective, overhead structures, whatnot. Right. You're absolutely right. If you were to, if you were to try and start a business tomorrow. Right. And didn't really have anything or an awareness of inputs or what made a good business in whatever field you chose, trying to leverage AI to create everything probably wouldn't necessarily create a great outcome for you. You'd still have to learn all those, all those mistakes that we all learned in the first five years. You could get to something that was really high performing.

Yeah. Wondering if you might speak to one thing that always circulates in my head and I think from a financial perspective you might be able to articulate it better than I can. Is like I often say that systems, they're important, but they're not really urgent. And that's generally why small business owners don't necessarily get to them and they stay on the to do list. And I try and really advocate for making them important and urgent. It's hard for the small business owner sometimes to justify the cost or the investment because it's an important, not urgent thing. Sometimes you don't see the ROI on it straight away. Or, you know, depending on, depending on which resource you're allocating to create those systems and processes. You're thinking, well, that's taking them away from doing billable hours. And I could be just making money straight on that. So it's trying to help business owners understand the cost for not doing. I don't know if you have any insight on that.

That is immense. I mean, that is at the core of the accounting finance, financial strategy industry. If I'm being really honest. If, if it wasn't for the fact that large businesses maybe had to lodge their accounts with ASIC every single year or, you know, you lodge your tax return with the ato, I really, I really think a lot of accountants would, would struggle with being able to justify their value to business owners. Right. So your point around understanding the value getting, not being able to see the roi, I think that is, that is, for me, that is the absolute cornerstone of a participant in this industry being able to differentiate themselves. Right. So I mean, just, just as an example, I, I would say, or a generalized example, I would say that most people in their businesses and this getting a little bit micro, wouldn't reconcile their bank accounts or wouldn't even have people to reconcile their bank accounts for, for months on end at the minimum. Minimum. Or whenever. Bas prep. So quarterly, let's say. Right? Yeah. Tells me that they're not looking at their financial information. Right. On a quarterly basis. So they're not looking at their financial information more frequently than a quarterly basis. Then how do they know that every single decision that they've made throughout that quarter is getting them to where they want to go from a strategic position or even just, you know, ahead above water operational perspective. Right?

Yeah.

So if, if, if they're running their business in that way, right. Then they're never gonna, this, this, this point you made around. They're not urgent. They, they recognize that it could not get any better because there is no system to make them understand that the ROI or the opportunity cost is never being captured. So they, they're going to be forever blind to it, is my point. And I, yeah, I have, I realize that you hope that I could articulate it better. I agree. Probably haven't articulated it better, but everyone struggles with capturing opportunity costs, right. Or undefined roi. But it is definitely there. It is definitely there. And maybe much like the switch that gets employees to buy in instantly, if someone can come up with the same switch for capturing opportunity costs for people. I think you would have an equally successful business and a phenomenal return.

It's funny because I think every discussion I have with business owners, I don't think I've ever had one where we haven't come to the conclusion that systems and processes aren't important. We always say, ah, yes, they add value, they reduce errors, they help remove key person dependency, they make the business more valuable and tick, tick, tick, tick, tick, tick, tick. All of these things about the value add and I think that the one that is often overlooked is that the opportunity cost and what you're missing out on. I almost wish I could be the Ghost of Christmas yet to Come and I could take them into the future and show them what their business looks like if they keep plodding along versus what happens if you deploy systems and processes. Because I've had the good fortune of looking in literally thousands of businesses and comparing the two. And it is like small businesses that are process driven versus those that aren't. It's like a night and day difference. But it's, it's incredibly hard for someone who hasn't seen it to really understand what it's costing them to. Not absolutely.

There's a, there's a, like a moment of enlightenment. I always remember the key statistic for me that I like to pass to people when they're thinking about making this, this mindset change is that most small businesses in Australia, the principals make less than they otherwise would if they did that role as an employee for someone else. I mean, that is a brutal reality for Australians in small business. But it really highlights that a lot of them don't take the correct approach to really running a successful business. And that is a business built on processes and systems that allow them to create repeatable work, to define their niche and their marketplace and all those kinds of things in a way that is successful. So completely, completely agree with you on that.

As soon as you said that, it made me remember a line Michael Gerber had mentioned to me. He said that small businesses don't work. The business owner is the one that does the work. So it's, it comes back to the business owner really being the driving force. And it's hard. It's like that classic. Again, Michael Gerber, I quote him quite a bit. But it's that technician who has the entrepreneurial seizure and all they can see is them doing the work because that's the picture in their head. They're used to being the hairdresser. They're used to being the landscape gardener or the accountant or whatever it is and they don't recognize that there's a different set of skills required to grow the business. And I actually think that systems development really or the ability to develop effective business systems is the master skill. Like if you can learn how to capture and codify best practice and pass it on so it can be delegated down to lower cost less skilled team members. Once you figure out that that's what breaks the cycle and ensures that you can then only focus on the new highest value activities. Which is basically the strategy, I know that goes full circle to what we talk about earlier at the start of this call. Really that's the work that you focus on is the strategy. You know, you can get any person to be reconciling an account or you know, matching up records inside Xero, doing the strategic work. That's, that's a different ball game.

Absolutely, absolutely. It's, it's funny that we have come full circle because I mean that's part of my methodology in the sense that it's, it's great to come up and taking a business owner on a journey and to show them what the future could look like. I mean just as an aside, I've my like you constantly testing things in the marketplace, playing around a lot with just classic compound interest calculators on on average like multiple returns on EBITDA to really articulate. Okay, yeah, it might cost you, you know, say a 20 or $30,000 investment to systemize your business a little bit more. But when, when we're seeing a two times return on that investment, if you, if you throw that over a 10 year period at just an average 14% return, let's say, right. It's millions of dollars, millions of dollars. And, and at that point they start to see the light and, and it kind of clicks for them a little bit. But it's funny even then, I mean we're all humans again and it comes back to that people behavior change is challenging, right. So even though they might on the surface or superficially want to go down the road of okay, creating a phenomenal industry leading organization, the behaviors have got to start. The behavior change has got to start in with them first to then start on their systems journey. So having a strategy is great, but then you've got to have the processes and systems to execute on it.

Maybe in the tail end like there's going to be some business owners that are listening to this. You know a big part of writing systemology was to Write the book that I wish I had when I got started. I feel like the E. Myth, attraction and built to sell and like a lot of the books that have come before me, all helped to build the importance, but it kind of missed the how to. And systemology was the, the step by step guide. I don't know if you have any final little suggestions or advice for someone who's just getting started and thinking, you know what, maybe I'll give this system stuff a go. Anything you could say to them?

Look, it's, there's, there's two things. I mean, and they're, they're going to sound like a cliche, but not enough business owners ask for help, it blow it. That absolutely blows my mind. And I realize that there is always a cost to it, but it's never. When you talk about the opportunity cost thing again, it's never as the opportunity cost is always greater. Right. So there's definitely value there. Definitely value recaptured. So reach out, speak to someone, get help. Because you could probably also just save maybe 12 months to a year of heartache on the journey of making mistakes and learning and things like that. Right. But then the second one, and again, another great cliche is, is to actually do it. Because going back to your point around systems are not a priority. Like they're, they're a necessity, but they're just not a priority. If, if you can take steady, actionable steps towards a really system systemized organization. Right. That then is moving in the direction of the strategy. You're leaps and bounds ahead of everyone else in your marketplace. Because I know firsthand that it's very easy as a business owner and also working with clients that, that rock up to work every single day wearing that, that operator hat and it's. It's just Groundhog Day.

Yes.

Yeah. Ten years later and not much has happened.

Yeah. Yep. I reckon that's. Hopefully that's enough to wake someone up. Someone will have watched this and they, that might be what they need. So now I'll link across to your website. But actually where's the best place if people want to learn a little bit more about what you guys do?

Yeah, look, the website. But I'm a people person, so if anyone wants to reach out to me directly through the website, by all means, my, my phone number is on it. Just call me. Straight, straight up. I, I'm a. People always love to chat.

Yeah. Rock and roll. All right. Thanks, Jared. Appreciate your insights, Dave.