479 9 Ingredients to Effective Change Management in Accounting Firms

If you work with accountants, you know, you can have all the good ideas in the world. In fact, this podcast probably attracts a lot of those ideas people, you know, and let's be honest, most people inside of an accounting firm, they hate the ideas person. Like, just chill out bro, we got a good thing going. Do we really need to change? And that's what we're talking about today. How to, how to be an effective ideas person, how to bend people to your will get them excited for change. When most accountants natural state, it's, it ain't that they want to be left to, you know, do do everything the same way they did it last month so that they can go home, play with their cats and watch Netflix and then do the same thing tomorrow. So today some practical tips on how to, how to get people on board. Dig into like why this can be a real challenge inside of accounting firms, but pretty tactical stuff. Sometimes I think this conversation goes a little too woo woo. I want to keep it practical. Let's talk about. Foreign. Number one. And you don't. I mean we've got nine here. Number one. It's bigger than all the rest of them, maybe all the rest of them combined. And it's the one that I don't see people talk about enough. The first ingredient to effective change management, it's incentives. You want to know why? Like you're excited about this thing that's going to make us more productive, but the person that does the work isn't. So because there's nothing in it for them usually to be more productive. The vast majority of accountants are paid to sit there big accountant heiny in a chair for 40 hours a week, maybe that's conservative. 40 or more hours a week. And while sometimes we'll have like other metrics, maybe like, like realization or maybe it's as simple as you got to get these 20 projects done every month. Well, sometimes we have some version of like expectations of work output. Normally they're not directly tied to what's going to hit your bank account at the end of the month. And I think oftentimes this is tough for us as entrepreneurial people to get our heads around because we weren't wired that way. We're like, what do you mean, man? When you work for a company, it's your job to make that company money. And it's, it's that mindset, honestly, that is like what makes achievers kind of climb the ranks and eventually own their own business oftentimes. But that's not the default for most people. Like if we set out with the expectation that everybody else in our business will be equally motivated to line your pocket, the business owner's pocket, as you are, then you're probably setting yourself self up for disappointment because that's, that's a real juicy incentive for you and will always be an incentive to everyone else less so. Like expect yourself to be most excited about the company making more money. And there's various solutions to this. We did a whole week on the podcast about production pay. So people on your team getting paid according to what they produce, the actual work that they ship out the door. And that's kind of a brute force approach to solving a lot of alignment issues. And just like purely paying people based on hours in a chair is, has a lot of flaws, purely basing people basing pay based on work that goes out the door, that's got some downsides too. But I would argue it's closer to alignment with you than just hours in a chair because you don't go home at night and stress over, ooh, how many, how many hours are all the employees in my business gonna work this month? You don't, you go home and you do the math on, on Jimmy's private school and you decide, maybe we won't fire that decline yet. But in your business, you're the only one that like is losing sleep over that. You'd be amazed how many problems go away the moment you, you have more aligned financial incentives with your team. And it's so funny that this doesn't come up more in change management conversation because I think a lot of change management thought leadership comes from like, big business. And if you think about like, you know, what would the big four and what would your regionals say about change management and, and how you get people on board, it's all going to be a lot of like kumbaya, sitting in circles, holding the hand sort of stuff to avoid and detract from the reality of this is just pumping more money into the machine and I'm going to see none of it. This is the cool thing about being able to run your own thing to, to make the rules, to do something different than the big accounting machines do. Like, this is our opportunities as sort of the, the pirates of the profession, the renegades, make something cool that your team's going to be excited about when it comes to any version of commission or production based pay. Like, it's spooky. The idea of it is spooky, but the more you dig into it, the less spooky it is because you design the formula. So there really isn't a way for you to go backwards. If you've done the math and if you think you have like a formula that could work, do that retroactively 12 months and see like how would that have penciled out for everybody? Think through like what are all the ways the business could potentially go sideways down the road? How does that impact me? How does that impact my team? You actually find that a lot of those concerns are equally problematic for production based pay and traditional payments. But nobody, nobody frets about like oh what if, what if I'm paying everybody a salary and then the business tanks like that, that's a problem as well, just like it would be for production based pay. But the next time you, you kick down the door and you're all jacked about something and you put it in front of their team, of your team and you're, this is just like a no brainer for you. And man did I have this experience so many times. Just a no brainer. And then you, you present it to everyone and they're just kind of like, they give you this nothing reaction and you're like, how can you not be more excited? It's because you hold a different level of excitement for the financial success of the business than they do. And there's a solution to that. If you do one thing on this list, do this like better align your incentives because again, you can have all the cool ideas in the world. I can do all these amazing things. But as long as your change management blocked can't make any of that stuff actually happen. Right? Okay. Number two is probably the most woo woo one on the list. Remind your team of their value. Because people, they get scared. Like they have this self preservation instinct that's very, very real. If you show them like for example, let's say you run a tax shop and you've got an admin or a junior staff person or something like that that spends a lot of their time chasing clients for documents and you say hey gang, look, there's this tool that will do all the chasing of our clients for documents for us. How do you expect that person to feel? And your mind probably doesn't jump to oh great, now we can can Jimmy. Your mind probably goes to oh great. Now Jimmy isn't going to waste all of his time doing that dumb menial stuff and he can come do this other stuff instead. But meanwhile, when Jimmy goes home at night and shuts his eyes, he dreams of, of chasing clients for documents. Like that's, that's his identity. For most of us, kind of we are what we do. And if that's what they do and in five minutes you show them a video of something that does what they do, just expect there to be like a kind of spooked reaction to that. And the only way to overcome that is just to like very clearly communicate what you see their value to the business being. And it's something probably a little more personal than the set of tasks that they have today. My hope for everyone in my business is that every 12 months those tasks have evolved. Somebody's not growing until their task list looks fundamentally different than it did. That means it's my job if I want them to grow, to ensure that they have somewhere for those tasks to go so that they can take in the new and the better tasks. But it also means repeatedly communicating this with my team where I don't want you to stagnate. Like I don't want your career to stagnate. And that means that the tasks that you're tackling, that stuff's going to evolve over time. And there's no way to get you out from under what you have already without those tasks going to another person, going to a machine, something like that. I as a very like logical robotic person is my wife here, just double checking it. Me as this like emotionless ro. Could have sworn I heard my wife. Me as a very tactical, unemotional person, I'm not gonna expect that reaction from other folks. So something I gotta make space for and ensure that I'm like over communicating that to people. Today's episode is sponsored in part by ClientHub, the practice management system that delivers wow seasons year round, not busy seasons. Seasons that will dazzle your clients for two reasons. One, ClientHub is drop dead simple, man. If you're too tired of a practice management system that just feels like you gotta have a PhD in learning something new. Client Hub, you hop in, the vibes are great, it just all makes sense. 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QuickBooks Large transactions, new accounts, new vendors, new customers. It's magic. Books review inside of Client Hub I think you might like it. Learn more about Client Hub. Check out the link down in the show notes. This episode is sponsored in part by Verdot. Here's a hard truth incoming. Oof. Bomb. If you're still managing your own IT, relying on generic IT guy, you could be non compliant with FTC safeguard rules, IRS Pub 4557 and WISP requirements. That's, that's exposure you don't need. But enter Barado's barrettguard. Barrettguard. Can I get some feedback on that? No. Okay. Berd Guard gives firms fully managed IT that's purpose built for compliance. That means your systems are monitored, patched, protected and documented continuously. Over 1400 accounting firms rely on Verito to stay audit ready. Gang. The reason we're actually talking Verito here. Can I go off script? About six months ago, I put out a post on social media and I said, oh, first party hosting from the usual characters you've heard of. Not great. What's everybody using? What do you like? And I saw a level of love and fandom from Varado and I'm like, hang on. Why is everybody so enthusiastic about like a hosting provider? I mean, don't get me wrong, it's important. And so Verdo, they have had a place in my recommendations ever since then because firms are just like, do it. You won't regret it. Whether it's I'll assert Drake QuickBooks Desktop. They speak your language because they work with a bunch of other accounting firms. Okay to schedule a free consultation just to learn more. What do you got to lose? Check out the link down in the show notes. Third ingredient to effective change management. Expose your team to what brought you around. This is, this is probably the biggest, the biggest point of frustration with folks who engage with my content. But like their partner doesn't or their boss doesn't or their team doesn't. We are just, we're products of what we consume, which I hate saying out loud. And none of us want to acknowledge this but we really are. The things that we watch, the things that we read, they kind of program our brain to a degree that's like, kind of concerning. Like, we have to be careful about what we consume and where we hang out because it impacts us more than we like to admit. And so if you're here listening to the podcast, if you watch the YouTube videos, you're just, you're getting kind of submerged in a version of thought leadership around accounting firm running that's just very different to someone else who is not plugged into thought leadership at all or even just plugged into other types of thought leadership. Like, I've, like, I've usually got a pretty weird spin on this stuff that I think is different than most folks that talk about running accounting firms. But what we do is we get all hopped up about this cool new thing. Oh, Jason got me all excited about this. And, and we do the same sort of thing where we kick down the door to the firm and we, and we plop it down in front of somebody and we're like, tada. The master plan for this problem that we've had. And everybody's like, yeah, no, I don't know, don't see it. Or they're like kind of lukewarm on it, and you're like, it's, it's so obvious. How do you not see it when the reason that it's obvious for you is you've been jacked into the matrix, just grinding the last 50 episodes of the podcast, or hopefully something more humble, you've been, you've been tucking into like this, this thought leadership and consuming things that are just different than those other folks are consuming. And so the best way that we can try to bring them around, and this was a lesson that I learned with my partner in my accounting firm, is we were just hanging out in completely different watering holes, doing something like, like going to a conference with your partner, with a member of your team, your head of cast, your head of tax, whatever it is, doing an experience like that together, that's so transformative. And the reason is, for one, it's like this shared experience, but also you're drinking from the same fire hose at the same time. And once you experience that, you realize that a lot of the, the friction and lack of alignment just comes from you hanging out in completely different watering holes and have different understandings of like, how you get this stuff done. And so it's easy to blame those other people and be like, how do they not get it? I mean, there's a Hundred examples of that. Like folks that will still, you know, use QuickBooks Desktop until the end of time. Folks that swear by just rolling hourly billing and kind of all the divisive things in our space, right? Where everyone, like, you've got a huge number of people that are like, while those people, like just, they just don't get it. And I mean, we do this, this isn't a work thing. We do this in like all sorts of different things, parts of the human experience and don't really acknowledge how, like, at the end of the day, everybody's kind of a product of what they've been exposed to and the environment they were raised in and the folks that they've worked for and worked with in the past. And we're all kind of just a product of our environment, but because we have different environments, we end up in different places. And so there, there is a way to reverse engineer this, to bring people along with you, and that is to expose them to the same stuff that's getting you hopped up. You're becoming the dealer, really. You're like, you guys, you, you all got to try this stuff. I'm, I'm liking it. I think you will too. I'm kind of joking, kind of not joking. Okay, number four, you got to give the people on your team a say. There's an entirely different level of buy in when they get to be part of the process and they feel like they've been heard even in very small ways. Like even if they were in the room and they didn't say a word, they'll try to try to pull things out of everybody in the room. Just being party to that decision allows for a different level of buy in because almost always you're not going to have full agreement on how to do X, Y, Z. But the expectation for everyone in the firm needs to be that we will at least all give it the college try. So I don't know what this is credited to, Bezos. I think the whole disagree and commit, like, it's okay to not agree, but everybody has to commit to the decision that we make together. And until you give everybody a voice and let them be involved in that decision making process, there's probably going to be some, some frustration, some ill will, some like, well, if somebody had just asked me about X, Y, Z, then we wouldn't have this problem. You ever bump into that? Oh man, I worked with a lot of these people. You bump into some problem down the road and you've got the person that's like, well, if they would have asked me nine months ago. I could have told them that was going to happen. And sometimes that's just people being people. Sometimes it is genuinely like not involving folks in the process. Sometimes, especially in small firms, when you are the big boss, you think that that's your job to make all those decisions. When all that does is give you more jobs, like when you're the one that's like, nope, this is the thing we're going to do and we're going to make it happen, then you're kind of putting that whole thing on your shoulders to make it happen, as opposed to some sort of change in the firm where you bring in a little think tank of people, they're involved in the process, and then they, they own it going forward. The long term benefit of that is they're kind of in charge of ongoing maintenance. How many projects have you stood up where you're like, here's a great idea and you just burn a whole afternoon on it and you kind of get a version 1 or a, a version 0.5 out and it works for a day and then it falls over and like, that's just kind of where it goes to die and you never get back to it. Right. That's the rub with, like, taking it all, taking it all, like putting it all on your shoulders. Okay, number five, create a safe environment for people to learn and ask questions. And this coming from someone that'll like, obviously I'm capable of, of coming in hot. But most, most accounts are not wired that way. And so it takes some convincing to get them to speak up. Oftentimes if there's folks in the room that they're intimidated by or they're afraid of looking dumb, they're not going to speak up for fear of that being a bad question. This is an argument for, like, having these conversations in smaller group and recognizing that, like, once you're beyond eight people in a room, it's very hard to have a meaningful conversation just because folks don't feel like they really have an equal platform. And that's, that's kind of a culture thing where if people have negative experiences asking questions or they get made fun of later for it, they're never going to do that again. So you kind of got to nip that in the bud and like, make very clear that we want to hear from people, we want to fully flesh this out. And there's no such thing as a dumb question. And you know what? That always solicits. You know exactly what that solicits. But it's okay to ask dumb questions. Better to better out than in, you know. I think that's true. Number six, we kind of touched on this a bit. Get people out from behind their desk or even like expose them to the larger world of other accounting firms and workflow automation and just kind of all the different stuff going on. I had a number of people on my team who I finally was able to kind of get outside the bubble of just our little tunnel vision of what we do in our firm. And when they see what other folks are doing, like it was just super energizing to them. And I know that was definitely my experience when I realized like, you know what, there's like tens of thousands of accounting firms working on the exact same thing right now. Yet here we are like sitting here trying to reinvent the wheel ourselves. They're really the best approach. Probably not so getting to learn from what other people do, but also just the, the difference it makes when you're out from behind your own desk. Like you're in a totally different headspace. Something about habitually turning up. In fact, the desk that I normally work at, it's you know, like 12ft that would not. 12ft. You wish it was 12ft that way. It's about five, five and a half feet that way. But today I went and I worked in a different place. I left the house to work. And something as small as that, like your brain just kind of works in a different way when you're in a different environment. The exact same is true with your team. It's really hard to get folks out of the same day to day routine if they're still in the same environment. And there's, there's something magic about getting folks out from behind the desk, but also getting your people together in a different place that opens up different types of, of conversations and different types of ideas. With that, it may make sense also to like plan when you're going to have these conversations. So like if you do an annual, you know, off site for your team or you're on a distributed team and you get them together a couple of times a year, this is a great, a great argument for having those tricky change conversations in person because you'll find folks are generally just more open, they're thinking about their inbox less, they're thinking less about that next thing they have to do. And so you'll, you'll see a greater level of flexibility from folks than you would otherwise as opposed to the worst possible time to drop something on your team, which is what Most of us do. When you come back from a conference all hopped up on ideas when the entire rest of the business is now blocked by you being out of the office. And so they're now all stressed because of the mountain of things that they have that they want you to do at the same time that you're coming in hot with all the things that you're excited about. And they're like, can you just cool it, buddy? Just go. Please respond to my hundred emails. Love that you're all full of ideas, but we still got to get this work done. Today's episode is brought to you in part by Team up who helps you hire direct in the Philippines. What is hiring? Direct hiring? Direct means you own the relationship with that person. Person. You're not paying a middleman, a middle person. You're just paying the person that works for you. And that's all they do is work for you. It's, it's, they're an extension of your culture. It's no different than hiring somebody in another state. You're responsible for training them. They're just part of the squad now. Things to figure out. The first time you're doing the what, what does it look like? What? 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Take Financial Sense for a spin for free at the link down in the show. Notes number seven. Energize your team. Like, especially if you've done any change recently, it's very easy for folks to get burnt out, particularly if change was hard or contentious or didn't go as you'd hoped. That energy is contagious. But you also know if you're the only one that can be that battery for everyone else, that can be really, really hard on you. It's actually an argument for working more with implementers, especially if you're doing a big change like rolling out a practice management system. I cannot recommend enough pulling in an implementer to be an independent third party who can sometimes be the bad guy, the bad person that can sort of diffuse some of the, some of the assault. It's one more person to kind of be a voice in the conversation and to bring energy to the entire process. There really is this like contagious element to being able to show up with energy, with excitement and try to bring people along. Obviously that's really hard when you're the only one doing it day after day. But it makes a difference, literally just how you walk into the room. What your very first statement is like, we set the tone oftentimes more than we realize. And I even think about this a lot in my own business now. Like if I'm stressed, everybody else is stressed. If I'm grouchy, like everyone else is on edge and that sucks and it's not fair because I ought to be entitled to be grouchy for goodness sakes. I have a three year old child, my three and five year old, they roll out of bed this morning. They're just absolute terrors. Until that blood sugar, until you get a little bit of food in them, they're just monsters. So I got to raise this whole squad and I never get the chance to just to be like, when do I get to be mean? I got to Put the brave face off of it. But then you come to work, and I'm like, I'm ready to kick somebody's butt, because I don't get to be mean in my home life. But I digress. Heavy is the head that wears the crown, right? You really can't have change management without somebody bringing the juice to. To just keep the troops going. Number eight, don't do too many things at the same time. In fact, if you're going through a change, I found it's worthwhile to kind of, like, do some wheeling and dealing with the team, to say, like, hey, we're thinking about doing this hard change. But if we go through with this change, like a practice management system, we're like, we're not. We're not going to revisit this for, say, 24 months or 48 months at a minimum. Because oftentimes the fear is like, what's next after this? It's helpful for people to be able to see the light at the end of the tunnel. And this is just. I mean, this is the most organized way to run tech change. Like we talked about coming into May and June, like, those are my months for making the bulk of the change to our tech stack so that we can lock that stuff down and be focused for the next 12 months and then revisit it a year from now. Because if you're perpetually looking over your shoulder, you're distracted by just a lot of noise and a lot of zigzagging that oftentimes doesn't lead to decision making. But your team, they're watching all this, and they're like, oh, I don't want to change again. So put some boundaries around how and when change can happen. And in most cases, you don't really want to be changing multiple things at the same time. It depends on how big your firm is. But if we can stick to just trying to land a single plane at a time, that's the best way to do it. Last one. Number nine is probably the second biggest one to, number one, hire the right people. Like, people are just. For sure, we can help folks, like, be more open to change. But a lot of people, like, they have an appetite for change. And I definitely. I had a situation where I bought into a firm, and so I had kind of like this split family of folks that I inherited and folks that I had hired myself and employing people who somebody else hired, especially if that person's still around, in some ways, that's a messy thing. And when those people were hired, it was through the lens of somebody else and their problems and their needs at the time that they hired them. And in my case, like, I was stepping into a firm where the partners did all the interactions with clients, they did all the heavy lifting. The job of the staff was to, like, sit in the back. Back of the office and get the work done. I bought out several of those partners so that the management of clients and all that stuff like that was going to a new sort of middle manager layer that had never existed before. And I was getting completely out of client work. So that's like the polar opposite of what I needed from staff compared to what the previous partners needed from staff. And anyone is capable of changing. They are. And there's a lot we can do to bring them around. But don't underestimate the power of even just bringing in one or two people who are energized by change. You're going to have folks who are firefighters versus folks who are like, the executors that want to do the same thing each month. You got to have some of both on your team. I was in a situation where I was the only firefighter for a long time, and that was exhausting. And all it took was one or two hires. When I. When I saw in them, like, oh, this is actually when they're having the most fun. Like, I had people on my team for whom April 15 was their favorite day of the year. And you know how much pressure that took off of me and off of everyone else around who, like, that wasn't what they loved. I had another person whose favorite thing. This was early days in the firm. Their favorite thing was dialing clients for dollars, like, calling them to get them to pay their invoice. She loved this. And that's weird, you know, and I'm not a therapist, but there's got to be. There's got to be something problematic that that stems from. But the fact that she was into that stuff took so much pressure off of the people around, like, off the partners, off of me not having to do that really stressful thing. And so I'm not really in favor of, like, cutting bait with the people that I've got. Generally, unless we're in a super desperate situation. Just know when you're making the next hire, if you're feeling this pain, don't let another person on the boat unless they're capable of being like, that energetic person that can bring the energy to the room. If it just feels like right now you're having to put all that stuff on your own back. Like truly one hire and they don't even have to be a high level person. They could be a junior person that's really excited about this stuff. One hire can completely change the tone. Like you are one person away from the room, having a different vibe. And I know a lot of the folks that listen to this, you're probably wired like I am, where you get excited about this stuff and you see so much opportunity and change. And it's frustrating that a lot of the folks we work with, they're not wired the same way. But ain't that just the human experience, man? Having to coexist with other humans, huh? Okay. Could have sworn that was my wife. Okay. Got any thoughts on change management? Good books you've read on it. Drop that stuff down in the comments. But what I really like before we wrap some live events I got coming up because what I would really like is to talk about this in person, man. Put our little brains together. It's. I can't tell you how great it is to meet people in person. It's like you've got that common ground. Like you can, I don't know, you just sort of immediately hit it off. It's fun. July 14th, I'm in Los Angeles, California, the City of Angels. Why do they call it that? Have you ever driven? Nobody who's ever driven in Los Angeles would be like, look at these angels. July 16, Denver, Colorado. July 22, Chicago, Illinois. July 25, Atlanta, Georgia. If you are within a reasonable drive, I want to see you, but I also want to see your team. Like bring the partner, bring, bring the folks that you're struggling to get excited about. This stuff. Like that may be the most valuable thing I can enable for you is getting the folks around you jazzed about this stuff. These events. I mean, there's a lot of people that are like flying out for these events too. So if there's a way that I can help you, get you your team, your partner, whoever needs to be excited, man, come out and hang, be great to see you. Hey, it's a great week to be an accountant. Okay? We're going to have a good one and I'll see you in the next one.