051 Change Management in Accounting Firms

Welcome in to where in the World Is Jason Dailey? Where I lug a whole bunch of expensive camera equipment around to record a podcast. I don't understand either, gang. We just had our 50th show last.

Time and I didn't even acknowledge it.

Congratulations all around.

Thanks for being here. What a wild ride.

This has exceeded my expectations by so much. There's like a thousand people that turn.

Up and watch this silly little thing we're doing every day and that blows my mind. So thank you for coming and hanging.

I like to think we are just making a whole, just creating a whole bunch of little, little, little wee baby.

Change makers around the profession that are having a positive impact. So hopefully we're doing some good here.

On the subject of change making today, it's or Tiny Tuesday, the theme for for this week, well, that's a cute idea, but it'll never work because of Client X.

You've heard it before, maybe you're living it right now.

This way better way of doing a thing could be fixed billing, could be a different piece of software, could be literally anything. And it's fundamentally better than what you do today. But you can't do it because what will old Mr. McJenkins say? There's some, some part of your business or client today that that just won't work for. And that is a reason for never changing. No, it's not. That's not how it is. Let's talk about it today. Some practical ways to navigate this conversation. It's Old Timey Tuesday.

Let's do it on Jason D.

This.

Was the first decade of my life in this profession. I acknowledge that I'm a real weirdo and like change more than most people do and get excited about technology and all of those things. And this was just the thing that I was up against probably more than anything else when I was working for other people in firms was, hey, everybody.

Check out this very obviously better way.

Of doing this thing.

Or should we really be sending paper organizers to people still? Because we've got quite a few clients.

Over here who are like, hey, can you stop sending me these?

And this kind of doesn't feel like the future.

But the reason he always did it.

Was, what about the olds? You quit worrying about the youths. What about the olds?

They don't know how to receive an email or this or that.

And what it did, like the really harmful thing that happened was we never changed as a result. And it's one thing to sit in a firm and say, I just, I'm.

Happy doing this till the end of time, the way it is, the status quo and all that.

But that wasn't our firm.

Like, people weren't happy.

There was too much work. The partners were like, yeah, this isn't.

Quite the lifestyle I want.

But they weren't willing to take the firm to what that next better version.

Of the firm was.

And you know, had I been, you know, if I could go back in.

Time and tell that version of me and talk to those superiors that I had, I think the main piece of wisdom that I see now that I didn't have then is building your firm and taking it from A to B.

Is not always going to be about.

How does that impact this client that I have today? Cause almost any change will be disruptive to a specific client. But it's more about how is this going to enable my next dream client who is fundamentally better than the clients that I have today.

So that, like, that mental shift is.

One of completely different agency for yourself. The former is, well, we have all these clients, so we have to do what works for all these clients. The latter is, here's what I want to do. Here's this thing that I think is better and if I can design the perfect firm for that person, I think we're going to get them. We're going to get those clients along with us. The clients in our client base which are better aligned to that version of our firm will be happier. Oh my gosh. That was another point of frustration as we had these really killer, like, long term clients who would come in and our systems wouldn't be suited for those people that worked a different way. But everybody agreed they were the type of clients that we wanted long term.

But we couldn't lean into the change.

That would make them happy and make them feel like they were in the right place.

So it can be. It's another example of those scenarios where it's really hard to see that different.

Version of the thing that doesn't exist yet because you're so fixated on what you have today, because you have 2020 vision for what you have today. But if you make that change, that creates some friction with what you have today. Like you can't see over that next crest yet of like, how is that reality going to be better? Cause you simply haven't lived it yet.

But there's so many people who are.

In unsustainable places right now and aren't really enjoying what they're doing.

And even if they are feeling pretty good, like I feel like aren't making.

The most of what they're capable of. Like, aren't. Aren't proactively going out after their ideal client and a greater level of specificity. And so when you, like, think of change constantly through the lens of who are the people and the systems and the clients that I have today, like, you will forever be anchored to that unless you can get out of that frame of mind. Frame of mind has to be, here's where we are today.

A firm is always going to be in motion.

You're always going to be changing.

You're always going to be getting more specific.

That's going to be driven by clients, by team members, by your personal interests.

By season of life.

What do you want to do?

That firm should, like, be. It's okay for that firm to be in flux.

That's completely normal. You're learning, you're growing. A product of that should be change.

So what is the change that gets.

You to what looks pretty good right now?

Like, what is that thing that would be more profitable?

Or that client on your list of a hundred clients right now? Who's that one standout client where you're like, well, this seems interesting. Maybe we should do some more of this.

If you throw out all the people and all the systems that you have today, what is the ideal firm for.

That type of client look like now?

In reality, like, we have to be.

Mindful of this to a degree. Like, you can't piss off 90% of your clients overnight and they all leave and they don't have any money. So this stuff still does factor in. But I think in many traditional firms, particularly in traditional tax firms, if you've had a client for 10 years, 15 years, there's a lot of fear in changing the process for them when that's how it's always been. Oftentimes, though, I think we actually underestimate the change that these people are capable.

Of and even, like, overstate their love for the current process.

I have found, as I've made these changes and talked with clients about them often, more often than I expected, they're like, oh, yeah, that makes way more sense. Or yeah, no, I kind of. That last process kind of sucked. I didn't really like that what they're doing is what you've told them to do. Like, that's the process. That's their expectation for how that's going to happen year over year until you tell them differently. A new client walks in the door tomorrow. We've talked about this. Like, you're crafting their reality every day from scratch, you're not subject to those same limitations. And in the interest of like, steering this in a constructive conversation with your overlords and with the people that you work with who maybe don't see the world this way, crafting that new reality for new clients for whom, like, that inertia in the existing direction doesn't exist, that can be a great way to get some initial wins. Like if it is truly better to make this change and better on the other side of this change, oftentimes for people to get on board, they have to experience that for themselves. And trying this alternate path with certain clients, this can be a way to get them some early wins to then buy into maybe a more ambitious transition to get more folks onto that new program.

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App or just use the link in the show notes. That's probably easier than figuring out what I just said. I got some bullet points on like change management more in general and like some best practices and just like some wisdom I can share from being up against that in firms. Oftentimes it's not like going to be 100% solution and like acknowledging these are sticky things. What is the right pace of change? That has never been harder to answer than now because change has never been so changey. Change is happening like faster than ever before. When we came into the like cloud accounting age and the like app marketplaces were blowing up and we reached this like never before experience level of app overwhelm. We were like, this is ridiculous. I miss not knowing every single piece of software and what it does, how am I ever going to keep up?

But it just got a whole lot.

Worse with all things AI. And it's funny like we're, and we'll probably still do this for a while. We're still talking about AI as like this new technology, when in my mind, like, it's bigger than that AI, like, is technology now. Like, virtually no software provider is not using AI at this point or shouldn't be leaning into AI at this point. Like, AI just is technology, but we're treating it as this new thing to learn. And in some ways by treating it as this arm, this like new specialization, it maybe lets us hide from it for a little bit longer because we decide, okay, for now, like, that's not going to be my expertise, there's going to be AI people and I'm not going to invest in that right now. And the reality is, like, AI is everything. Like AI is tech now. And the impact of that is that AI is like changing at an unbelievable rate that is faster than anything we've seen before. New model could drop tomorrow. That fundamentally changes the way that we can get some aspects of our work done. And we just don't know when that's going to happen. So the rate of change has already been a struggle. Like accountants, I mean, you want to generalize, but by and large, like, accountants are not known for being excited about change. That being said, man, like, name another industry that has had to change more in the last couple of decades. Like, in the grand scheme of things, I do think accountants are maybe sold a little short on how much they are required to change. If you just look at cloud adoption and how for people like, you know what my firm did, like, we are often the change makers for our SMB clients. Like, we are leading the charge into cloud, into integrating systems better building custom integrations and all that. But for the members of your team and the people out there who, for whom change is hard, it's gonna get.

Worse before it gets better.

It's probably just gonna get worse actually. I don't know that it's gonna get better. Change, like the rate of change and all that, it's just getting more and more hard. So how do you create a healthy place to work for those type of people? Is there a greater tax, like, is there a greater cost to employing folks that are change averse or do you need people that are change averse? Like, is there a healthy bit of, like, do they create a healthy bit of friction and change that can sometimes just be like too much change? Right. I would say something that I think is a positive that can help your team feel like they understand what that process is going to look like is develop. Like agreeing to a cadence for change and I think we talked about this in the past around the context of deciding on a practice management system for a firm. If you put out a meeting for your team and say, ta da, we're changing practice management systems, 90% of people are going to be like, screw this, man. Here goes the next 24 months of my life. If you say, here's the deal, stuff's changing, we need to move to a better system. But we're going to make it a rule. We're not going to do this more often than like X number of years. To me, that's better. So like, when it comes to kind of the core systems that you rely on, I think because there's this element of like, it's like, well, it's like buying an iPhone used to be where like it was growing really fast and it was like, there was never a good time to buy an iPhone because at any given point a better one was just around the corner, right? So then how do you ever choose the right time to jump in if you never jump in? You've missed the boat.

If you jump in now, man, what if that next thing comes out, you know, next month? It's way better.

What about that?

Like, AI first new software company that.

Drops just this like totally bomb practice management system in three months. That's incredible. What then? Like, there is no way to navigate that right now and inaction is not an option. So one healthy construct to implement with your team, but also for yourself. Because if you are a solo operator, you are just crippled by indecision from all the different types of tech the that you see. And it's really hard to turn your brain off to, oh, should I be doing this? And it just kind of adds to that sense of overwhelm, making that deal to yourself, making that deal to your team about, we're not gonna change this sort of thing any more frequent than X Cadence. That's okay. That's probably really healthy right now because if you leave that door open to your team, like, they are living in this, like, for the folks for whom this is most stressful, they're then living in this limbo of, I don't know what this is gonna look like a month from now. Like, what does it even mean to invest in our processes now if we don't know if our systems are gonna get turned on their heads? I don't feel that because I enjoy change and I thrive in change. And you may have team members that are that way, but a lot of accountants are not that way. So as a firm Agreeing upon like cadences, like kind of the maximum cadence at which you will change certain things that at least gives them like a worst case scenario to plan around so that if in four years time or whatever the deal is you do change it, everybody's like, yep, that was the deal. And like I think there's a little less of a degree of them holding that against you then as but that is like still that is better to me than leaving that door wide open. Change, like the success of change. I think it's easy to over rationalize change and see something and be like this is fundamentally better and that be the rationale for change. But the success of change like fundamentally comes down to the humans involved. So as hard as it is as like very rational accounting type people. And I am like shouting at myself right now, if you don't have the people to make it happen, if the people don't have the endurance or the stamina to make it happen, like it's just not an option. So like that, that for me has been a really difficult thing to grapple with. When I know that fundamentally better way that there is to do the thing. I know how to get it from A to B and I know that the team has to be involved like on board for it to work. But folks are exhausted because we just changed practice management systems because we feel like we're at our limit where for how much change we've gone through recently. If you just blow straight through that and you're just the ROI robot and you're the one that's not paying attention to people, it not only jeopardizes the success of that change altogether, but it makes people less open to change down the road too. Like it makes change more anxiety inducing. And when you have those negative periods of change management that are really hard on people and create friction between team members or even if you're solo, like are really, really hard times for you, nobody wants to do it again in the future. Like it makes that whole thing even harder. So you can kind of like not only bungle that transition, but make it even harder in the future by forcing those things through. That's something I haven't always been good at. Trying to be mindful of the appetite of the folks around me for executing well on that change. And then you get into that situation where everybody is just shot and like, I mean that's been covet like Covid relief just ran us into the ground. But there was all this change that needed to happen and we tried to run it through anyways. And, like, you just. You put the whole thing in jeopardy, and then people aren't at their best when you, like, need to make this stuff happen, and it becomes just this really frustrating situation. And so it can be hard to, like, put away that rational ROI cap. And, like, there's. There's. I guess it's worth acknowledging that there's going to be times where it's like, yeah, this is a way better way to do this. But right now, we don't have the people and we don't have the energy to make it happen, unfortunately. Now, obviously, there's a lot of, like, ways to manage that and, you know, be mindful of that and the people that you hire and how you incentivize people and encouraging a culture of change. And there's a lot that goes into that. But forcing the issue, in my experience, can create bigger issues than you think you're going to solve by, like, ramming that change through. Hey.

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And your clients was sending nice gift baskets for about what firm 360. Learn more in the link in the show notes below. Now, what's really frustrating here is when you make your own internal agenda and you're like, here's the things I'm excited for. But then you're impacted by external change that is outside your control. And so that could be new legislation, could be an unexpected thing like Covid Relief coming up and totally derailing your plans. This is kind of one of those things where, like, you have to almost, like, bake in a degree of patience, like a patience allowance for the unexpected. Because there will almost always be new stuff. Like I was a tax pro in Oregon where they were just spinning up new taxes left and right. And those things often didn't kick off in a very streamlined way. And it created a bunch of additional work that we had to do for our clients. And we had to explain to them why it was important. And it was all really frustrating because.

We had our own plans for what.

We wanted to do that year.

And on that list was not help clients navigate this new tax.

Like, that was the last thing that I wanted to do in my firm running journey and getting us to this more efficient place. But no amount of that being frustrating to me is going to give those people their energy back. So, like, there will be times where that that plan for change will get derailed, and that's okay. And it's another example of where I think in our heads by default, we are always thinking about the best case scenario where everything goes swimmingly and nothing unexpected comes up. Right? It's like how you plan the rest of your week. That plan only includes all of the things that are on your radar right now. And inevitably things come up that were not on your radar, which means 100% of the time you fail to meet the plan. And then you're like, how did I get to the end of this day and not get all of these things done? And it's just kind of another way where we kind of set that bar too high for ourselves, I think, because we're not accounting for all of the unexpected things. Those have been some of the most frustrating, like change management periods in my life when we're like, okay, we worked really hard. We made this plan, and we're trying to do it in a responsible way. And then this other thing came up and we don't have anybody to work on it. And is this really just going to bungle this big plan that we've tried to execute in a responsible way?

That's frustrating, buddy. That's life that's probably yet another argument.

For like, excess capacity and trying to like. And not like always having the team at the limit because you never know what's going to come up, particularly around change management. Like, there's, that is, there's a lot of excess capacity that could be consumed by that. Like, if you can find a great admin operator that can be a good help with this stuff, that is absolutely excess capacity worth having if they can help run that change through. And then those people even, it's like, if they're new people, like, they're immediately super useful because they are the subject matter expert in that new thing and they have like, a deeper level of understanding of the business than they would otherwise had they not helped you through that process. Now, another thing I've had to get better about is changing existing processes without crushing the spirits of the people involved. Alex Kalaf. Am I saying that right? Khalif sent me some of these bullet points. This was a good one of his. Oftentimes when we're doing that super robotic, like, rational ROI calculation, we overlook ex, like, okay, this process is better. Let's go do this. We overlook how the person that currently oversees that process is going to feel about it, you know, maybe how the person who built that previous process is going to feel about it. And oftentimes getting aggressive with change like that can kind of steamroll people. And that's not really a fun place to be in. I will say, in the beginning of my firm running journey, this was a big problem. And you had people that were territorial around the processes that they managed because.

That was their baby, because they thought.

That was their job. And so to come in and change that or even move it to somebody else, like, the, the natural fear that person's going to have is around like self preservation, not necessarily what is right or wrong. I think over time we got better about that being something culturally within the firm that was more accepted. And we almost framed as being something to expect not to, like, personalize change and to understand that, like, amidst change, people's roles are going to be pretty fluid. And like, ultimately for you, progression in your career has to look like moving to new tasks. There is no progression to have as long as you're doing the same things. So there's generally gonna be opportunities in those changes. But in my early, in my early firm days, a lot of the resistance that I got when I was like, hey, gang, this is like a fundamentally better way to do this thing, was not like, the pushback was not through a rational Lens, which was really hard for me to understand. Like, the world is much simpler for me when I'm, you know, at that age. And I don't understand the politics of all these things that have been happening. And this, you know, this person who got put in charge of this thing for 15 years, after 15 years, and they were really proud of that. And I come in and I'm like, man, this is dumb.

Why do we do it this way?

Like, this way is very obviously better. I wasn't that flippant about it, but I think that's how it's received from the person on the other side of it. So, like, the more that you can try to maintain a culture of collaborative change and change not being somebody's fault, we're not changing this process because Steve bungled the process. We're changing this because we've learned, because the world is changing, because the tech that we use is changing. This is a big stopper to, like, intrapreneurship, I think, is person A not wanting to step on person B's toes. And the more that that can be like A. That culture can become more collaborative, and people are rewarded for those ideas and for speaking up and putting their nose out, but then also for being, like, champions of that change and actually making it happen and executing on it, then, like, in my experience, the less personalized that stuff has been. Because if you're in a. If you're in a practice where change is hard and you have a bunch of change averse people, I think change can be very personal and you, like, no amount of rationalizing. A better timeline, a better way of doing something will, like, overcome that very human aspect of feeling threatened by change, feeling like it's their fault, that that's no longer the right way to do something. And, like, that all starts from the top with the tone and the attitude that you set around change. That was probably the hardest. Probably the hardest aspect of me for working with other people, because we're full of ideas. You know, I was the type of person that would, like, tune into, you know, whatever the 2010 version of this show was and be like, gang, I just learned this new thing. You gotta check this out. I'm so pumped about it. And for me, that's very black and white. But when the other people hear it, they're like, oh, yeah, but what about that work we did six years ago to, like, revamp all these processes? And now, like, Susan's in charge of this and that, and that complicates this. But when you're still like, baby face, new to a firm, and you're just motivated to make that stuff happen and make an impact. You don't think of all that context. But yeah, there's like, if there's one takeaway here, I think, for navigating change and managing that conversation with your superiors, I think one of the best things I learned was that, like, ultimately your firm, how it feels, what it's like to operate day to day, is a product of all of the clients and all of the work that you do right now. And as long as you're too afraid of upsetting that apple cart and changing what gets done, how, how it gets done and who you do it for, until you're willing to disrupt that, you.

Won'T get to a better place. And even if the place right now is okay, man, like, you should never stop growing.

You should never stop getting more specific in what you do and developing, like, your approach to doing this work into something that is more refined and that starts with, like, ideating. Right now we're here, like, what's the slightly better version of this that we can start with the very next client? This is like, a hypothesis that we have right now that we want to test. Let's try it with a new client, see if we can get a few wins to see if this makes sense. If it does, then you, like, start thinking about a bigger rollout to the other clients. Maybe it's something that you eventually make mandatory, but you got to start small. Like, the stakeholders involved have to get some easy wins. And rather than getting super rational and being like, hey, this is totally better than this. Cause it very well might be. Instead of that, paint the picture of, like, what the firm looks like that is leaning into that, that is appealing. Like, that is a vision that people can get behind. More so than being laser focused on the specific process or the specific thing that you want to do is, like, paint the picture of what that future firm can look like, get people plugged into that vision, and then start taking baby steps, Figure out a way that stakeholders can get some small wins to start stepping in that direction. And, like, that's the way to make that happen. Not, like, stamping your feet over this, like, ideological difference. Right. Like, that doesn't ultimately get people from A to B. I don't think. What do you think for the folks.

That have navigated this stuff successfully and.

Maybe that are on the other side of this? Any positive advice you'd have for folks who are stuck in these situations, struggling in places that where change is really hard. Would love to see any advice you got down in the comments.

Thanks for coming and hanging. We got Q and A Wednesday tomorrow. If you got any cues, drop in.

The comments and I'll see you tomorrow.

Bye.