Session Moderator: Welcome to all of you joining us today! Today we are excited to present Paul Dunn and his workshop, Towards The Timeless Practice.
Remember that this is YOUR workshop. If you have any questions, please jump in and ask. If we miss a question, I'll "collect" them for answering at the end.
With that, I'll turn it over to Paul! Welcome Paul! We are glad to have you today. Or is it night, there in France?
Paul Dunn: It's night. Welcome. Hopefully my web connection from France holds up. If not, I'm logged in on a colleague's system right next to me on a different ISP. Oh and one important thing tooâ¦at the end of our session I'll be making something very special available to you so do please stay connected for the entire session.
As we build this concept of the Timeless Practice, right now there are 6 "characteristics". In short they are:
The Practice does not price or bill on the basis of time; Partner's do NOT do the work; is REALLY in touch with clients needs through defined processes; is a GREAT place to be for everyone involved; operates locally AND is globally networked; has enduring values that everyone on the team knows and subscribes to.
Since our time is very limited today, let's invest most of our time today in these three. Everyone OK with that?
Stephen VanFleteren: Yes.
John Bassett: Yes.
Stephen O. Slamon: Yes- and explain the basis of working on rather than in for everyone Paul.
Paul Dunn: Stephen, working on, not in coming up later.
Stephen O. Slamon: thanks
Paul Dunn: OK, let's deal with the issue of time. As a first point of action, everyone connected today must (yes it is a must) go to www.ras-net.com, go to the library and get a copy of Ron Baker's book, "The Professional's Guide to Value Added Pricing." It is without ANY doubt, THE most significant book ever written on the profession.
Paul Dunn: Still today, most practices (I would prefer to call them "businesses") bill based on time. DOING THAT IS PROFOUNDLY WRONG. Any comments on that?
Steve Thatcher: Even if a firm values prices, doesn't value come back to time invested?
Stephen O. Slamon: Only 24 hours in a day- so time limits amount you can bill. Have to find another basis for billing!
Paul Dunn: Steve, value as we will discover in a moment, has nothing to do with time spent. Value is only ever determined by the client.
Ay other comments or do we all NOT use time as a basis for billing or pricing?
Dona: How do you measure team performance if not using time?
Paul Dunn: Dona, coming to that in a moment.
Steve Thatcher: Ok, Paul, but how do we discover what the value of our services are to them?
Paul Dunn: Essentially, you ask. And then use FPA's or fixed price agreements. When you connect TIME and BILLING (as in a time and billing system) you are inherently saying, "my value is in some way related to the time it took me to do it." Yet the truth is that value is only ever determined by the customer or client.
Stephen O. Slamon Steve- we used FPA's for the first time this year in tax season for all returns- average bill went up significantly because client set the fee based upon our input and analysis of the complexity of the job.
Paul Dunn: Great to hear Stephen. That has been the experience worldwide.
Stephen VanFleteren: How long would you set up a fixed price arrangement for? One year?
Paul Dunn: Yes, but you review it all the time by using the concept of change orders.
Steve M: Steve - Did you sit down with each client to negotiate it during the tax interview?
Stephen O. Slamon: Yes - at the beginning of the interview- we negotiated fee- and only lost 1 engagement for the whole tax season because of the price.
Paul Dunn: Yes Steve, you do. But you can also finesse it using what we call 'menu pricing'. That means essentially turning your services into products.
DDearman: But isn't "analysis of complexity" a time-based measure?
Steve M: Steve - Do any of your clients drop off work?
Stephen O. Slamon: Many mail-ins from all over the world- including UK and Africa. Buy that isn't the issue- those clients pay more anyway because their returns are more difficult.
John Bassett: Paul, I was at the Atlanta session in January when Ron Baker made a presentation and I purchased and read the book then. While I enthusiastically endure his ideas I am having difficulty with gaining any momentum with the bean counters in my organization.
Paul Dunn: Hi Jack. I'm going to give you a web address in a moment to deal with that.
Bean counters have a problem with it because it is in their DNA! When you connect TIME and BILLING, you are actually saying âTime by rate equals value.â YET YOU KNOW CATEGORICALLY IT DOES NOT. Yet most practices act as if it were true.
John Bassett: So true, but they make up a majority of most firms and must be dealt with.
Paul Dunn: John, the web address will be useful for you too.
Steve Thatcher: Paul, even with FPA's, isn't there always someone out there who doesn't value their own work who will do it for LESS? Hence we price for value and lose clients.
Jack Fox: A great deal of accounting output is perceived as a commodity. How can you value price that?
Paul Dunn: It is NEVER a commodity unless we choose to make it so.
Stephen O. Slamon: Don't worry about losing those low paying clients- better clients are on the horizon- use the extra time to create value for the better client.
Paul Dunn: And Steve, Stephen has just got it absolutely correct. Linking timesheets to billing is, to put it in the extreme, ruining the profession. And some would go further and say that the mere act of keeping timesheets and using them only for billing shows you have the wrong value system in place.
Has anyone got a GREAT reason for keeping them?
Stephen O. Slamon: And we continually low-ball the audit pricing- but who else on earth can do an audit?
Paul Dunn: Right on Stephen. Stupid isn't it?
Stephen O. Slamon: Absolutely- turn a monopoly into a price-war commodity.
Steve Thatcher: Not for billing, but for internal control... to judge productivity - is the only reason for timesheets!
Rick Ferretti: I keep time only to know my job cost.
Paul Dunn: How do you use that cost info Rick?
Still no other GREAT reasons?
Rick Ferretti: In adjusting my fees prospectively and deciding what client relationships work and identifying areas that need attention in our work process.
Paul Dunn: Ok. As long as you don't connect it to pricing. It is a real trap.
Paul Dunn: To move away from a time-BASED (as opposed to a timeLESS) practice, do two things: read Ron's book and move to what we at RAS call the menu-pricing concept.
John Bassett: We are either Sadist or Masochists.
Paul Dunn: Right on John!
OK. Final thing on this particular aspect of the Timeless Practice. It's a second action point for you. Please go to http://www.ras-net.com/asp/news/newsinfo.asp?iNUMBER=189
And read an e-mail I received out of the blue last week plus some great discussion points. Then please get involved in the discussion going on at that URL.
OK, on to aspect two of the Timeless Practice, in full it's this: exists forever and therefore does not depend on the partners. The partners' role is to âorchestrateâ superb performance from the team. The partners do NOT do the work. It operates as a Business as opposed to a practice.
Any comments on that?
Steve Thatcher: Does this apply to all sized firms?
Paul Dunn: for example Steve?
Steve Thatcher: One partner and 4 staff members- should the partner not bill but orchestrate?
Paul Dunn: You will be more profitable (and more timeless) when you orchestrate.
Michael Gerber, in his classic book, the E-Myth (you can also get it from the library at www.ras-net.com) puts it best of all. He correctly says âthe goal is to work ON the business NOT in it.â "Most people," he says, âare doing it doing it doing it until there is no more will left to do it.â And at that point, they give up and die and the business becomes anything but timeless because IT DEPENDED SOLELY ON THEM rather than on systems.
Session Moderator: Paul can you elaborate on "orchestrate" and am I understanding that partners should not bill at all?
Paul Dunn: The best example of orchestrate is Benjamin Zander, the conductor of the Boston Philharmonic. He makes no noise yet the orchestra makes beautiful music.
Paul Dunn: And partners should operate as part of a team, more on that in a moment too.
Stephen O. Slamon: And it can be done in an accounting firm. With our practice- 9 total team members- 3 partners- we try to bill less than 1000 hours this year. Next year's goal is 500 per partner- but add 3-4 more team members.
Paul Dunn: Fantastic Stephen. It needs to be less than 500.
Steve Thatcher: Are there any partners in today's discussion who spend more than 50% of their time orchestrating??? (On Purpose...)
At RAS we take that concept further provide a) systems to do that and then b), most importantly, systems for you to get your clients to do it. That's the wonderful concept of 'duality' in action. What works for you works well for clients too.
There are several keys here. First, literally run the practice as a business so that the current partners have defined roles with defined outcomes rather than âpecking orderâ rights.
Any comments? You are a quiet lot so far!
Stay tuned for the surprise at the end and then get the transcripts.
Second key, think from this point on of the practice as a BUSINESS. It'll change forever what you do.
Third, create teams and give them the responsibility of client contact. Instead of having Managers, call people Client Managers and introduce them at the first moment of contact to the client explaining as you do it that THEY not you the partner are the prime source of contact and all things good!
Fourth, create Project Groups and focus around Projects rather than around hierarchy.
Fifth, get great systems so that the business depends on systems as opposed to being dependant on people.
That's a lot to take in. Any comments questions so far?
Richard Ferrone: Do you have an example of a project group?
Paul Dunn: Yes, the creation of a Business Development Unit, for example.
Session Moderator: Paul, it sounds a lot like what self-directed teams are doing in many industries outside of accounting. The idea is to empower the people who do the work.
Paul Dunn: Precisely SM.
Session Moderator: So that they will manage their projects and themselves, freeing up time for others to do what they do best. Not that they go totally unsupervised, that is. It turns more from supervision to collaboration.
Paul Dunn: Or another example would be what we call an 'awesome service team' to lift service levels dramatically. The people closest to the client (i.e. team members) always know best what to do.
Session Moderator: Exactly - when systems need to be revamped, the answers are usually not far away.
Jack Fox: Paul how does all of this work for the sole practitioner? How does one orchestrate himself?
Paul Dunn: You choose not to remain totally sole. It is difficult to become timeless as an SP totally sole after all.
OK, now to the third characteristic of the Timeless Practice. In full it is: it exists forever by continually being just that little bit ahead of the market and by striving to serve its customers' ever-changing needs. It has mechanisms in place to constantly check on the value it's providing to its clients. It is categorically NOT a compliance-based business.
Session Moderator: But even if it isn't compliance-based, there is still room for compliance work to be done, right?
Rick Ferretti: I presume you are not suggesting that we don't do compliance work but that our emphasis is not on compliance.
Paul O'Byrne: I've just done a seminar today for prospective clients. Got through 3 hours without mentioning a tax return ...or anyone asking about one! The seminar was called "Grow your business and get a life". That's what our target group are interested in. But if we waited for them to tell us, we would still be waiting.
Richard Ferrone: What is currently "a little bit ahead" of the market?
Paul Dunn: A little ahead Richard means moving faster than most people do to help their clients. More about that in a moment too.
Paul Dunn: As they would say in Australia - ONYA Paul! And yes to you Rick but you need to be careful.
Session Moderator: What do you do when the "pain" a person feels is in a compliance area?
Paul Dunn: It is always related to something else. A medical friend of mine used to say 'prescription without diagnosis is malpractice.' It comes back to systems and much better questions.
Rick Ferretti: Paul, please explain what you mean about being careful.
Paul Dunn: Well, it could become something you fall back to. You have simply got to burn some bridges we find. Any comments Paul in the UK?
Paul O'Byrne: Rick, the clients NEED compliance, they want proactive help with their futures. We haven't thrown away our compliance skills; we just don't thrust them forward as what our clients should be primarily getting from us.
Paul Dunn: Great answer Paul. Thank you.
There are several keys here: One, use technology heavily. For example CAN newsletters in the traditional sense and instead form what we call Businesses Getting Results (or BGR) groups and âconnectâ with them weekly via an e-mail list program or, better yet, by Instant Messaging processes.
Two: frequently use what we call Client Advisory Boards to be close to your A-class clients by listening to them and having them as a de-facto âboardâ for your business. Experiences with Client Advisory Boards are universally positive. Any comments on that?
Key number 3 here: as one Results Accountant and Boot Camp firm put it, I now contract out my compliance work to someone who is crazy enough to charge me by the hour for it! Now that must surely ruffle some feathers or get some comments!
Session Moderator: That's what I call thinking outside the box!
Paul O'Byrne: I can't type fast enough. But... we really resisted the idea of a CAB for our firm. Every excuse we could think of. But when we did it, one client talking about a planning day led to another buying one GBP3,000 sale.
Session Moderator: Paul- did you say how much?
Paul O'Byrne: Three thousand pounds.
Paul Dunn: But it works! One client in the UK sends his compliance work to India electronically. He gets it back in 48 hours. It costs around 200 pounds. He charges it out at 10 times that. Very smart huh?
Session Moderator: I'm curious; do they review the work before giving it to the client?
Paul Dunn: Yes.
Session Moderator: And, are they totally focused on non-compliance activities?
Paul Dunn: Absolutely. In the sense that Paul O'Byrne was talking about a moment ago.
OK, moving on. When you do the first three things we've spoken about (not based on time; work ON not in, create a real closeness with key clients) the fourth characteristic of a Timeless Practice falls into place that of being a place to which both clients and team members are attracted. It does not suffer from the âwe just can't get good peopleâ syndrome.
My colleague Debbie Peri did a workshop on that topic a few weeks ago so it will be good for you to search out that transcript.
The 5th characteristic of the Timeless Practice is increasingly more and more important each passing day is this: operating globally as well as locally by forming alliances around the world.
The truth is, of course, that your clients can be up and running as an e- (or what I prefer to call a âg-businessâ where the g means global) in one afternoon. Therefore if you're not âconnectedâ and/or thinking globally right now, you're not serving clients as well as you could.
Paul O'Byrne: Do great work and you've got something interesting to tell/show prospective employees at interviews
Paul Dunn: Right on again Paul. Thank you. We know of people who are checking on whether firms are Results Accountants before they send in their applications. People don't want to do boring things any more and be judged by timesheets!
Stuart Jones: Bon soir Paul. Is it too late for a pom/limey/Brit to join the chat?
Paul Dunn: Hi Stuart. Paul O'Byrne is on line too.
ON point 5 of the timeless practice - My simple action point here: come to the Accountants' Boot Camp and then become a member of the Results Accountants' Network joining over 1000 leading-edge firms around the world connected, sharing systems, knowledge AND clients in truly interesting ways.
OK. About to go for point 6 of the TP (timeless practice). Before we do, any more observations, comments questions?
Paul O'Byrne: I was really hesitant about this Global thing. But then I got to thinking. Amsterdam is only two hours away. That's less than some parts of London on a bad traffic day! English is the language of business. Why be parochial?
Paul Dunn: Global is the only way - and it is obviously quicker Paul.
Paul O'Byrne: I was but now we're better organized, I'm back doing the work I love.
Session Moderator: Paul O'Byrne, you are saying that you were orchestrating most of the time, but now you are back doing accounting work? That, which you love?
Paul O'Byrne: Not accounting but BD work. The transition from Compliance to business development (plus a bit of compliance) took a long time. Partly getting our heads round the concept, then persuading the team, then the clients.
Session Moderator: I have one collected question Paul. Are there any partners in today's discussion who spend more than 50% of their time orchestrating??? (On Purpose...) Paul, do you personally know of firms who have put this practice into play?
Paul Dunn: If anyone would like a copy of a wonderful tape on orchestrating, e-m Bryan Calhoun at [email protected] and ask for the Quality of Life tape, it's really good.
Session Moderator: Paul, it looks like we have about five minutes of our regularly scheduled workshop left. Did you want to make an announcement?
Paul Dunn: Almost finally, and quickly, the issue of values. These are enduring things that do not change that everyone in the business subscribes to and focuses on. The best way to describe them is to point you to a document that we use at RAS.
Ok to go with my final point SM?
Session Moderator: Yes, please...
Paul Dunn: And now finally, I promised you earlier a special gift for joining this workshop today. Here it is: an opportunity for you to have your practice professionally analyzed. It's normally a $550 service we provide at RAS to look quite deeply at some of the key issues in your practice. Your involvement is very very simple. Just e-mail Bryan Calhoun at RAS at [email protected] and tell him you'd like to try what we call the PDQ process. Again, it's a $550 service but quite free to you as a way of saying thank you for being a part of this session today.
Session Moderator: That's quite a generous offer Paul. Thank you.
Paul Dunn: Pleasure.
Session Moderator: The time today has flown by! Thank you, Paul, for an informative and entertaining session. I'm sure you've opened many eyes today! We appreciate your time and expertise.
Paul Dunn: It was my pleasure. Hope it contributed.
Session Moderator: Thank you for joining us today. Have a successful and fantastic week!