Are you an Architect or a Firefighter? Maybe you should be the Doctor! During a recent partner retreat, the Managing Partner told the following story: "A potential client asked each member of the proposal team: 'Are you an architect or are you a firefighter?' We all know the answer that the client wanted to hear. However, it was very surprising that a member of the proposal team stated that there were times when he was a 'firefighter'". If you were a prospective client, what would be your reaction to this response? This is a true story; and unfortunately, the potential client chose another accounting firm. How would you answer this insightful question? You know whether you are the architect or the firefighter in providing client service. If you are a firefighter by design; namely deadline driven, then you need to start changing your behavior. There are wonderful benefits if you decide to step out of your proverbial comfort zone, if you are in one, and stop procrastinating. Outstanding client service is a hallmark of a firm's continued success, forming the fabric of its culture. Yet, we hear the frequent stories of clients leaving a firm due to lack of service. How would you best view your relationship with your client? Do you consider yourself a doctor? When you meet with a client to review their financials, you are the doctor diagnosing the symptoms. In the business world, the CPA as MD, caring for client's fiscal health, should be the overall service theme. According to surveys, the following are the five highest expectations of the CPA professional: Tangible concern providing recommendations to improve the company's operations. Rapport - close interpersonal relationship between the partner and their client's top management. Ability and willingness to listen and to help identify, understand and resolve a client's business problems. Exhibiting a proactive attitude - anticipate problems and especially opportunities. Timeliness of performing services These five key points should always be foremost in your mind while you are servicing clients. In order to improve your delivery of client service, I suggest reading the following books: Strategy and the Fat Smoker by David Maister The Ultimate Question: Driving Good Profits and True Growth by Fred Reichheld Eat That Frog! by Brian Tracy Generally, people do not like to change their service providers; namely, accountants, attorneys, doctors and dentists. However, a client will only accept average service for so long before selecting another service provider. "Before you show me how much you know, show me how much you care" is a frequent reminder of the importance of functioning as the "business doctor" for each client. Finally, it is always best to obtain feedback regarding your service. Client surveys are certainly acceptable methods; however, it is best to have a face to face meeting with a client to discuss whether you are exceeding their expectations, especially for the top 20 clients of the firm. I call these meetings "At Risk Assessments". The results of these meetings will be a good barometer to determine the degree of client satisfaction and whether you are serving the client as the "Doctor" to their business. When there are service issues with a partner, they need to be immediately addressed and possible changes made to the client service team. GALLAGHER'S THOUGHTS Many CPA firms utilize an Income or a Non-Equity Partner title. Recently, a Senior Manager issued the following memo to a Managing Partner regarding their promotion to Income Partner. "As the end of the month is approaching fast, I thought that I would outline key items that I would like to discuss with you regarding my promotion to Income Partner: To what degree will my authority to make decisions change? To what degree will I be involved in the strategic positioning of our firm? Role Definition - As we are currently in the process of developing job descriptions, I assume that my daily duties will remain the same and will change as our business evolves and the firm continues to grow. I need to know what areas you would like me to be responsible for in the future. What is the best approach to tell management, staff, clients and the business community about becoming a Partner? Will this promotion be used in our marketing plan? What percentage will I share in income? How will this be determined? When will it be distributed? To what degree will I have a say in the firm's budgeting process? What will my compensation be? Will I have key-man insurance? At what point will I be considered for Equity Partner? At what percentage and what method will be used to determine value of my interest? Is there an initial purchase price to become an Income Partner? Will there be a written agreement to review prior to our meeting? What will be the investment to become an Equity Partner?" Needless to say, I was very impressed when I read this list of questions and suggest that each firm considers preparing a similar document for meeting with prospective Partners. THE WAY WE MERGE NOW Succession has always been a driving force for many mergers, and this trend will continue at an accelerated pace due to the aging of the partners in many firms. If the average age of the partner team is 50 and above, it probably is best for them to consider merging to solve their succession issues. Larger firms continue to address their expansion strategy by acquiring firms in strategic locations. Larson Allen acquired firms in Philadelphia and Bethesda, MD., as part of its strategy to become more of a national firm. Beard Miller recently announced that it has acquired a firm in Syracuse, NY. Crowe Chizek acquired a firm in Florida. J. H. Cohn will probably enter the Philadelphia market. With the advent of the eight new auditing standards, together with the infrastructure investments required for a firm with between $1.5 million and $2.5 million in annual revenue, you will see many of these firms merge during the next few years. Firms would like to maintain their position in the Top 100; however, with a difference of approximately $6 million separating No. 76 from No. 100, it will be impossible for some of these firms to maintain their status with just organic growth. Therefore, many of these firms are identifying solid merger candidates as part of their expansion strategy. DON'T LET YOUR FIRM'S CORE VALUES GATHER DUST SITTING ON A SHELF USE THESE 10 GREAT TIPS FOR KEEPING THEM ON THE FRONT BURNER Accounting firms are using creative techniques for keeping their core values in front of their employees, clients, referral sources and prospects. Here are 10 great ideas that accounting firms are using to keep their core values in the forefront: 1. Keep core values and discussions about them on your firm's intranet. 2. Give every new hire a copy of your firm's core values on their first day at work. Make sure they're in a display-worthy package, such as set in acrylic block or inscribed on a plaque. 3. Present an annual or quarterly award to the employee or partner who best lived and embodied the firm's core values. 4. Make sure your firm's core values are prominently displayed in your lobby, break room, elevator and other public areas. 5. Inscribe them on your firm's coffee mugs. 6. Have a core values portion of every staff meeting with recognition for team members who've exemplified them since the last meeting. 7. Order a cake or cookies with the firm's core values written on them. 8. Be sure they're visible on your firm's Web site. 9. Mention your firm's core values regularly in your employee and client newsletters. 10. Ask how a partner, supervisor or manager lives the firm's core values on a daily basis on upward evaluation forms. FOCUS FOR ENHANCING FIRM CULTURE TO ADDRESS THE FOLLOWING ISSUES: BUSINESS DEVELOPMENT/MARKETING BUILDING A KNOWLEDGE BASED FIRM CROSS-SELLING (CROSS-SERVING) DEVELOPING FUTURE LEADERS ENHANCING CLIENT RELATIONSHIPS AND OUTSTANDING CLIENT SERVICE NICHE GROWTH AND LEADERSHIP PROFITABILITY - MANAGING KEY PERFORMANCE INDICATORS SUCCESSION PLANNING ISSUES ARE ACCOUNTANTS REALLY BORING? When I sit next to someone on an airplane, small talk always precedes the big question of "What do you do for a living?" My initial comment is, "I occasionally lecture around the country and consult with CPA firms." My fellow traveler's next question is, 'Which group do you address?" "Accountants," I reply: "What do you do for excitement because you must have boring days," is the usual, trite response. How did the boring stereotype become so widely accepted? I cannot pinpoint one primary source, however, I can call to mind a few examples from the entertainment world. Turning on Cheers presents an opportunity for the world to see our buddy "Norm" - the proverbial accountant. If you have seen the film Ghostbusters, you may have noted that the "nerdy" character was an accountant. Also, it is an interesting fact that in another film, Deathwish, the character that Charles Bronson played was an accountant, according to the novel. However, the film's producers believed an audience would have a difficult task in accepting a "vigilante accountant." Thus, the character's occupation was changed to a "vigilante architect." Our profession is more than 150 years old. Yet, traditionally, we are classified as bean counters or the individuals wearing the green eyeshades. Therefore, I thought it would be great to have a newsletter for accountants, dispelling the popular myths. THE POWER OF THE WRITTEN WORD How often do you receive a letter from someone thanking you for something that you had done for them or even for a job well done in the office? Or, have you sent a letter of encouragement or praise lately? Several years ago, as I was traveling around the country for a few weeks to present seminars, I happened to get a late start for the airport. I arrived at the front entrance approximately five minutes before my flight was scheduled to take off. One of the Sky Captains for USAir, a young heavy-set gentleman in his mid-twenties, pleasantly greeted me with "Can I help you?" Dragging five large boxes and my luggage with me, I explained to him that I was in danger of missing my flight. He immediately placed the boxes and my luggage on a baggage cart and then ran through the airport. By the time we got to the gate, the door on the plane was closed. However, through the Sky Captain's persistence, the gate agent opened the plane door and I was able to board. The Sky Captain proceeded to place my luggage in the bottom of the plane. When I returned from my trip, I immediately went to the outside baggage location and found out the individual's name; and subsequently wrote USAir a letter praising this individual for his outstanding performance. A few weeks later, I received an acknowledgement from the air carrier informing me that the letter would be placed in the Sky Captain's personnel file. Approximately two months later, I received the following letter from the Sky Captain's spouse: "I can't thank you enough for taking the time to write to USAir about my husband's performance. My husband dropped out of high school in ninth grade and his thanks everyday are people slapping a few dollar bills in his hand. His self-esteem is very poor and you really don't know what that letter did to build his self-esteem, but more importantly, it certainly helped our marriage. Thank you." From that time on, I have tried to acknowledge people through the written word. Every day can be a "great day" if you begin by thanking people who helped you the day before - it is a powerful way to start the day. Remember: Spoken words are a fleeting satisfaction - the written word lingers forever. HAS CLIENT TIME BEEN PROPERLY CAPTURED? Today all client time is not being recorded which is adversely affecting utilization and profitability. In fact, firm-wide utilization has dropped 12% over the last 15 years. It is very important to capture all client time and then decide what time can be billed. Utilization in CPA firms and, thus, profitability will decrease unless there are specific policies and oversight responsibilities to ensure that client time is captured and recorded properly. We live in a two-second society, with emails, faxes, and many questions on client matters, with much of that time not being recorded. Additionally, in today's intellectual profession, there is a tendency not to record problem-solving time. This will be a serious problem unless firms implement necessary procedures, which include policies, monitoring programs and consequences. You should ask the following daily billing overview questions: Did I capture time regarding clients' e-mail? Did I capture cell phone time regarding client conversations? Did I capture time regarding two-minute conversations with staff on client matters? Did I capture office telephone time on client matters, especially two-to-five minute conversations? Did I capture "intellectual problem solving time" on client matters occuring outside of the office? DELAYS IN BILLING ADD UP In today's turbulent times, it is necessary to provide valued services at the highest level and when the service has been completed, a bill should be immediately issued! Delays in billing and leaving amounts in WIP will result in significant write-offs in a down economy. Additionally, once a bill is submitted, it is extremely important to make phone calls on the 31st, 40th, and 45th day. The adage business as usual takes on a different meaning when there is a recession. History has shown that the number of days in receivables and WIP will increase during a downturn in the economy. Each firm needs to monitor their days in receivables and WIP and make sure that bills are not only issued upon completion of the engagement but also that the collection procedures are in place. A SHORT COURSE IN HUMAN RELATIONS THE 6 most important words:  -    "I ADMIT I MADE A MISTAKE." THE 5 MOST IMPORTANT WORDS:  -     "YOU DID A GOOD JOB." THE 4 MOST IMPORTANT WORDS:  -     "WHAT IS YOUR OPINION?" THE 3 MOST IMPORTANT WORDS:  -     "IF YOU PLEASE." THE 2 MOST IMPORTANT WORDS:  -     "THANK YOU." THE 1 MOST IMPORTANT WORDS:  -     "WE" THE LEAST IMPORTANT WORDS:  -     "I" ATTITUDE ADJUSTMENT: It's your ATTITUDE                                         not your APTITUDE                                                                         that determines                                                                                                     your                                                                                 ALTITUDE If your staff has a "good" feeling on a Monday, then the majority of the time, they will have a productive week. Everyone benefits from a productive week! Remember, Monday is the starting time and Friday is the finishing time. The question, then, is do you want your staff to finish the week with joy or with pain? In athletics, the message is NO PAIN NO GAIN. Should that be the same in the business world? As a supervisor, why not start the week with a smile and a positive attitude? Eliminate the pain for your staff! 6 STEPS FOR REMEMBERING NAMES 1. Look at the person's face for an unusual feature. 2. As the person is introduced, listen to the name. 3. Immediately translate the person's name into an object with a vivid mental image. 4. Repeat the person's full name as you acknowledge the introduction. 5. As you repeat the name, use your imagination to physically associate the object with the distinguishing facial feature. 6. Following the encounter, look back at the person a few times to reinforce the association you have made with his or her face. QUOTES FOR PROFESSIONALS "BUSINESS IS A BROADWAY PLAY - Always remember that you are a mentor in your firm. You are on stage every minute of every day." "BEFORE YOU SHOW ME HOW MUCH YOU KNOW, SHOW ME HOW MUCH YOU CARE is the best way to go about managing people and servicing clients." "THE POWER OF THE WRITTEN WORD is more sacred than anyone can imagine. A pat on the back lasts a few minutes, a written note lasts forever." "CPA'S AS MD'S CARING FOR YOUR CLIENT'S FISCAL HEALTH. Remember, you're the business doctor and you need to prescribe the medication for your client and let them know exactly what they need so that you can provide them with valued services." "IT IS YOUR ATTITUDE NOT YOUR APTITUDE THAT DETERMINES YOUR ALTITUDE. Be positive, especially on Monday morning. If one has a good Monday, they generally have a productive week." "VALUE BILLING IS A REALITY and you need to provide clients with valued advice to improve their overall profitiability, productivity, and cash flow of their respective organization." "STAND-UP PRESENTATIONS WILL ALWAYS BE MORE SUCCESSFUL. Remember, when you are seated no one can see the energy and your charisma. When you stand up, they get the full picture." "HAVE YOU MOVED YOUR CHEESE LATELY? What behavior change needs to be made to strengthen your managing people, client services, and marketing expertise?" "COMMUNICATION IS THE KEY TO SUCCESS. Always determine how you and your team can work better together to meet each other's expectations." "ENHANCING PUBLIC SPEAKING AND PRESENTATION SKILLS should be a priority in your professional development goals." "CAPTURING EMAIL, CELL PHONE, TWO-MINUTE CONVERSATIONS AND INTELLECTUAL PROBLEM-SOLVING TIME IS NECESSARY in today's intellectual, capital, and technology environment." "EACH LEADER NEEDS TO IMPROVE THEIR EMOTIONAL INTELLIGENCE QUOTIENT. Enhancing self-awareness, self-regulation, motivation, empathy and social skills will be the barometer on climbing the leadership ladder." "CROSS SERVICNG YOUR CLIENT NEEDS through utilization of your firm's services will be the hallmark of your client service success." "CONTINUED EDUCATION AND THIRST FOR KNOWLEDGE are keys for your professional development. Read a book every 90 days to enhance your leadership, marketing, and practice management skills." "ESTABLISH 90-DAY GOALS to accomplish desired results - Genius is in the Implementation." "FIRST 15 MINUTES OF EACH DAY: THINK MARKETING Send notes to your clients and referral sources." THE MILLENNIUM RESPONSIBILITIES OF CPA FIRM LEADERS Twenty years ago the focus for CPA's was on Technical Audit Taxes and Firm Financials. Now, in a global marketplace, changes are significant, resulting in a substantial number of other responsibilities and tha means greater planning Please click here for our Recommended Reading List for Partners and Managers of CPA Firms. R.J. GALLAGHER & ASSOCIATES, INC. Management, Marketing & Educational Consultants Chatham Tower, Suite 1-L   112 Washington Place Pittsburgh, PA 15219-3504 412/281-8559 - 412/281-2115 FAX Click for Email