the next generation is purpose-driven. firms that lean into this will retain scarce talent.
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the disruptors
with liz farr
jack flaherty believes that one of the most important business skills is on the wane: the art of decision-making.
“we’re all becoming ‘yes’ people. we don’t want to have an objective discussion, bringing out different ideas,” flaherty says. the unfortunate result is that “it’s causing us to make decisions that don’t allow us to achieve our goals.”
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to help individuals master this vital skill, flaherty wrote his book, the decision switch, and created a platform of the same name. as flaherty explains, “the decision switch is to define your goals in clear and simple terms and build a clear path forward that allows you to consistently get those results.”
flaherty says it’s easier to make the right decisions when you clearly focus on the organization’s mission, values, and goals. without that focus, “you’re going to make choices that may not benefit yourself or the firm.” firms without a sense of what makes them different may be in jeopardy, flaherty warns. “if you’re just flourishing because you’re the only accounting practice in town, the next college graduate can knock you off that post, and you may find yourself going toward obsolescence.”
according to flaherty, decision-making is a crucial skill for leaders who want to retain their best people. “their ability to make those visionary, strategic decisions that capture the intention and embodiment of their people are really what compels their workforce to want to passionately work for them.”
leaders should tap into the collective wisdom of their organizations by asking questions, which helps to generate new ideas and leads to more well-informed decisions. while some may think a collaborative approach means making decisions will take more time, flaherty maintains that it won’t because “you’ll be able to delegate decisions. you’ll be able to make much more well-informed decisions because you don’t have to ask somebody to research information,” flaherty says. he maintains that team members will come to meetings with knowledge in hand.
asking team members for their ideas can also result in a team “that will die for you,” flaherty says. while you don’t have to go along with all the ideas, “being open to those conversations shows you’re a human being, and that endears people to you,” according to flaherty. that endearment also motivates people to work extra hard for you.
16 key takeaways
- the decisions leaders make impact virtually every aspect of their organization, but we don’t recognize it. our smallest choices impact everything.
- if you can prove you have the chops to handle someone’s needs and solve their problems, it doesn’t matter where you are. can you deliver and meet expectations?
- before making any decision, consider how the decision fits into your organization’s purpose and overall goals.
- to build a world-class firm from scratch, you need accountants who are dynamic and decisive and who can build wonderful relationships.
- the next generation in the workforce is purpose-driven. firms that don’t adopt this are approaching obsolescence.
- we’re in a world with a shortage of mentoring. to retain your best talent, you must combine education and mentoring in interactions with team members.
- let people work in their zone of genius. this also means collaborating with other providers with expertise in areas outside your experience.
- we need to re-align partner incentive models. if a partner has to give up revenue to use another partner’s technology resources, no one is incentivized to change.
- consider new compensation plans for partners so they can leverage their skills across the organization. let firm members use their talents where they align with the mission and purpose, even if that means they need to pass their book of business to another partner.
- help your colleagues improve by coaching them in areas where you excel. share your knowledge so everyone gets better.
- people are not innately happy when they’re doing work they’re not good at.
- instead of lashing out at constructive criticism, ask a question: if that’s not going to work, what do you think will?
- if we carry the problem forward by following saly, we’re not going to find the solution.
- value billing puts a commitment on the table versus the uncertainty of hourly billing. you’re betting in confidence that your team is good enough to deserve this price.
- relationships matter more than the shiny object of ai and technology.
- try investing 5 percent of your resources in doing some a-b testing. if one of 20 projects succeeds, you’re doing well.
more about jack flaherty
jack p. flaherty is a former executive officer, strategic advisor, and big 4 risk management consultant. crediting his success to the confident and decisive teams he had built over a twenty-plus-year career, jack is now a passionate advocate who speaks, writes, and consults on the value and skills required to make critical decisions. having conducted thousands of executive interviews, he’s found high-level decision-making one of the greatest daily challenges. yet, he observed that many of his clients were never given the requisite training or tools to make effective and productive decisions confidently. a knowledge gap that frequently instills fear and anxiety, as well as contributes to performance issues for individuals, teams, and their organizations. this reality became the catalyst for authoring the decision switch™: 7 principles of successful decision-making, a proven methodology that transforms individuals into decisive leaders who can make confident decisions at the speed their role requires.
transcript
(transcripts are made available as soon as possible. they are not fully edited for grammar or spelling.)
liz farr
welcome to accounting disruptor conversations. i’m your host. liz farr from 卡塔尔世界杯常规比赛时间. my guest today is jack flaherty, founder of the decision switch, and author of the book the decision switch. welcome to the show jack. how are you today?
jack flaherty
i’m doing fantastic. so glad to be on your program, and i love talking about disruption, so can’t wait for our conversation.
liz farr
fantastic. now, first, can you tell listeners just a little bit about your company? the decision switch is an intriguing name for company.
jack flaherty
absolutely, i’ve been fortunate to have four distinct careers. i was in derivatives trading, was doing assurance and accounting work for deloitte and pwc. been consulting for a long time, and then i threw myself at the world of high tech and blockchain and automation and ai. what i saw throughout the process, though, was one of our most important, if not the most important, skills, decision making is waning, and i won’t say we’re getting terrible at it, but we’re all becoming yes people. we don’t want to have an objective discussion, bringing out different ideas, the whole idea of inclusion, getting others ideas we’re just shutting down, let alone the psychological factors of whether it be of our biases or emotions, it’s it’s causing us to make decisions that don’t allow us to achieve our goals. and i wrote my book and my platform, i speak, and i want to connect with individuals, because that is how you break through. that is when you get the aha moment saying, this is who i am. these are my values. it’s the values of my company. and then only then do you truly get buy in support others, to follow your corporate mission, your goals, or even your friends to just champion you to be a better self. and so the decision to switch is to define your goals in clear and simple terms and build a clear path forward that allows you to consistently get those results.
liz farr
i like that very much, and i i’ve read a little bit of your book, and what i like about it is that you start out with figuring out what your north star is. most of the organizations that i worked with, the cpa, firms i worked with, i had no clue what the organization’s north star was. it was just, you know, let’s just crank out tax returns and audits and bookkeeping.
jack flaherty
and i think that is where the accounting industry right now is ripe for disruption. because when we think about it, yes, our purpose is to deal with the financials in whatever way, taxes, whatever it can be, issues with the government or just making sure that your shareholders get the right results. but if you think about it, aren’t most firms small or large. they’re conglomeration of small businesses. every partner has their self interest that they’re driving for, and it’s not that they don’t think about, yeah, the other work that each others are doing. but if a firm or individual cannot create a goal that no matter what viewpoint you look at that goal and agree, yes, that is our destination, then you’re going to make choices that may not benefit yourself or the firm. and so it’s critical, particularly today in the accounting industry, to figure out what is your niche, what is makes you different? because if you’re just flourishing because you’re the only accounting practice in town, well the next college graduate can knock you off that post, and you may find yourself going towards obsolescence. so your goal is, what defines you, makes you different, unique,
liz farr
and this is, this is kind of a change in the last few years that i’ve seen in accounting firms, because you need to differentiate what you are doing from everyone else, and i think a lot of that is because we’re no longer just competing with the accountant down the street, but it’s accountants all over the world. oh
jack flaherty
in if we think about even the resources i’m working with firms that are taking individuals out of india with 10 years of experience, placing them at firms here in the united states as first years and they already. have, because they already have experience, so they’re going to move quicker and excel. so even from the workforce, there’s competition. but to your point, because we’ve gone virtual, we’re living in a digital world. the playing field has flattened this whole notion of hierarchy of the big four, and then the next tranche, and then you go down to the regional and local players, it’s gone. if you can prove you’ve got the chops to handle somebody’s needs, because you are a needs solver, it doesn’t matter anymore where you are. it’s can you deliver and meet expectations?
liz farr
absolutely. now, one of the now, one thing that you mentioned you emphasize in your book is how important decision making is in leadership. can you talk about that for a minute?
jack flaherty
i created a phrase, and for me, it just embodies why i did that the decisions our leaders make impact virtually every aspect of their organization, from housekeeping to people that are actually performing daily jobs. we don’t recognize it. our smallest choices impact everything. but when we think about our leaders decisions, their ability to make those visionary, strategic decisions that capture the intention and embodiment of their people are really what compel their workforce to want to passionately work for them. and when we start to, quite frankly, make decisions that push down the layers of where those decisions are made, and start empowering individuals. it gives them confidence. it builds, you know, a fulfillment for your organization, and it really just drives a culture where your individuals become much more dynamic, bought in, engaged for what you’re looking to accomplish, and reflecting quick, quickly back on what we were just talking about, about the mission, the purpose, the niche of an organization, when a leader can confidently step back, they have their own thoughts about what we should do, but rather providing the answer. ask, solicit information. what are your experiences? how are clients you know, responding to the worker questions you’re asking? we start to generate new ideas, and when we change the way we approach decisions by doing in a purposeful manner, but allowing our organization to participate, we make more well informed decisions that initially our reaction is, it’s going to take more time. no, it won’t. you’ll be able to delegate decisions. you’ll be able to make much more well informed decisions, because you don’t have to ask somebody to research information. they come to a meeting and saying, did you see this? we need to act upon it. and so that is why, from a leader’s perspective, how they approach decision making, you are the leader you set the vision. you may be the ultimate person making the final choice, but if we do so in a collaborative manner, purposeful matter, and do so in an objective way that eliminates emotions and bias, i assure you you will consistently achieve successful goals and eliminate the obstacles that, quite frankly, become more excuses.
liz farr
that’s right, and i like what you say about about pushing the decision making down, because i think right now, we’re at a tipping point between an old style of leadership, where all the decisions came from up on top, to a more collaborative and holistic version. what? what? what are you seeing in that arena?
jack flaherty
we it’s a paradigm shift. i’m 49 years old. i’m old enough where i don’t care about my age anymore. when i grew up and when i started coming up the ranks, you did what you were told. you know, accomplish this task, take this next step, and you gathered that knowledge as you grew up. we are now in a world where we don’t have time for mentoring. many of our conversations are just like what we’re having right now. so there’s no transference of knowledge. we’re just expecting people to figure it out. and you. where i see the paradigm shift is we’ll start with, you know, our younger generation, they’re individuals that are communicating and engaging the worlds in ways that we never did. you know, social media, those types of things, they flourish at once. the last time you walked into a a room with the 20 something, and saw them walk up to a stranger, shake their hands and introduce themselves. that that is where i believe accounting firms in general are faltering. we don’t have the interpersonal skills. and the firms that i’m working with, they are desperate to rebuild those kinds of skills, because it’s not a matter of fear. they just don’t even have the body mechanics to do that anymore, let alone talk about business development and growing the practice that’s all coming from a select few at the top, the rainmakers that have always done it. i don’t need to do that, because sally or bob will bring that in. and now let’s talk about, you know, the leadership, the older generation. these are the the for better words, the old school folk. they got work because it had to be done. there was a scarcity of firms that did this kind of work. so they automatically got the work because they were friends with a law firm or whomever. so innately, or just the natural skill was to build relationships with, you know, feeder organizations, those organizations are also going global, and so traditional relationships still drive business, and they always will. but if you really want to drive value with your organization, if you really want to grow your organization, and as we all know, there’s a resource shortage, if you want to retain your best talent, it’s by switching and coming to a point where both sides, their talents, they come together, where you have a mentoring and education. and, you know, i, when i work with clients, i like to, you know, break the ice and with, you know, i talk and just talk to the whole organization about what’s going on, you build working groups, creating problems where you have to look at it from multiple sides, because it’s not just one vision that will create a solution, and frequently you do need some level of coaching, because there’s individuals that they literally just need to get out of the rut. and it’s not easy if you’ve never done it before. and i was just talking on another podcast about, you know, future trends in professional services, particularly, look at how many firms that are, you know, out there that they don’t aggressively go after, say, digital marketing, or even, i mean, i personally wouldn’t do this either. you know, put the firm on, you know, a billboard of the side of a road. it’s just too far outside of the box of what they would do. how many people do those types of practices that are making tenfold what your firm is doing? and i’m saying that it’s the right way to do it. i’m just saying before you say no, why don’t we unpack that, explore that. what’s that mean for our brand, our image, and how can it help us adequate into the future drive shareholder value and grow the practice? because buying trends are changing, and if you can’t define your niche, your value proposition, your ability to connect with another individual, you know your firm will creep along, your career will creep along, but you’re not going to get that growth curve that we all want, because it might have been in our our pre call talk, but the level the playing field has been leveled in accounting, you see the big four competing with your organizations that are $50 million in revenue and vice versa. so there’s no reason why you can’t put your shoulders back, figure out who you are, what your purpose is, and connect with another individual and win and deliver exemplary work
liz farr
exactly now. now, something you touched on there is about keeping talent now. talent in accounting has been scarce for years. you know you can go back decades and you can find articles about how hard it is to find people. what ideas do you have to make? make things better.
jack flaherty
scarcity creates innovation. and because of ai, automation technologies, services, these types of things, there is an aversion to jumping into the world of accounting, because my first interview out of college was with a stockbroking firm, the ones from wolf of wall street, with dozens of people making phone calls every day. that industry’s gone. let’s look at accounting. will that be the way of accounting? i don’t think so. actually, i don’t believe so. and the reason there is a sophistication, but there is going to be innovation. and so anytime you have scarcity, as in resources, and now you have these new innovative technologies, as we’re already seeing, a convergence is happening, emerging computer science with accounting. i’m sure about half the accounting schools have already done it. but there’s one less aspect that i don’t believe a lot of firms are really pushing forward. it’s having those big ideas. how do we tackle these problems? so many firms will throw bodies or few extra hours just to solve a problem. we don’t take a step back, going back to a purpose led decision making mindset. figure out what we are and build a solution set so we know what assets are required, rather than saying we’re going to hire 50 less people this year, because there aren’t any. first figure out if, you need those people. and is there a different way to do it? so when we look at, you know, retention of talent, the greatest way an accounting firm can retain their talent is to get their workforce, full body and soul, bought into that purpose, that mission. if you just think you’re a tax planner, it’s it’s white paint on a wall. but if you purpose that we’re assisting, whether it be not for profits, or companies that want to go public, or how we’re going to make organizations successful. emotionally, you just bought me in, and that changes, and the second part of that is by bringing them into the conversations. i’m not saying having hours long conversations. i actually just posted about efficiencies and the reason why we should be asking, what’s the purpose, or what’s the goal before we take any action or make a decision, we don’t want to waste time by having massive meetings where everybody’s chirping in but creating idea funnels, sales funnels, all these types of things that help bring forth great ideas, and you recognize people for their accomplishments, and by recognize people for their accomplishments, getting their buy in and giving them a true sense of purpose is what retains talent, and that’s why i love working with organizations to flip this on its head, because accounting, to me, is it’s a wonderful industry. it’s a beautiful way to launch your career, because there’s so many different opportunities with it. and i want to see more accountants, but i want to see accountants that are dynamic, decisive ones, that can build wonderful relationships. you want to build a world class firm from scratch, those are the ingredients of success.
liz farr
absolutely and and i like your emphasis on making it, making the firm part of something bigger than just the individual. you know, if the firms i been at had said, well, we are in the business of helping people make their dreams come true, then that would have been, you got my heart and power, that would have been something powerful, then we would have always been approaching every engagement, every encounter with a client, as how can i make this person’s dream come true? how am i contributing to that? i
jack flaherty
mean, i don’t care that we’re back in the 1980s or now in the 2020s, those kinds of statements move people, and we are now in a generation where our next generation of workforce is purpose driven. organizations don’t adopt a similar approach obsolescence are just, you know, kind of going along are going to become the norm for them. and i want to see your small, your mid size, even your large firms explode, provide, i don’t say new innovative offerings, but new ways to connect with their clients, because you can become the trusted advisor we talked before about the call. the ability to connect and really help somebody are the things that i know i will count when i’m rocking in a chair old in life, not the dollars that i have my accounts, what happened to contribute back to the world, and i think that is so important, more so than ever before i’ve seen in my career,
liz farr
absolutely now, for years, the business model for accounting firms has been pretty much the same, but in the last, i would say, decade, and more intensely in the last few years, we’ve been seeing people make some big changes in how they deliver services, in how they charge for their services and in how they operate their firms as a whole. what are some of the changes that you’re seeing in the firms you work with?
jack flaherty
you have a whole consulting project scope? one question, which i absolutely love as i start the beginning of the conversation. large or small accounting firms are conglomeration of small businesses. each partner has their own book of business, their own people, and there’s some level of sharing of knowledge or resources, but ultimately, you know, i’m at stake for my own book of business. well, picking, you know, drinking, i was drinking coca cola earlier today, taking coca cola if you were their accounting firm, i can only imagine the annual fees that they charge to do their taxes. they employ vast amounts of people to be flipping through and summarizing and checking and doing all these kind of things well that one partner doesn’t need to sell anything else, all the revenue well more than covers the salaries of their team themselves, whatever. well, as we’ve now adopted automation, artificial intelligence, new other methods to execute this work. well, their team doesn’t have that skill set. i gotta go to somebody else’s team. that partner has their own for better words, revenue targets to hit. how do we start dividing up the revenues if we don’t start questioning the incentive models for partners, for firms, for even staff, to work together? break down the silos. we are incentivized to not change, to not innovate. because if i’m gonna have to give up my revenue just so i can use somebody else’s technology resources, i’m incentivized to not change. so for your audience that are partners of firms, again, i don’t care what science we’re talking about, if we don’t rethink our purpose, our mission, our goals and how we align the incentive programs to them, you’re not going to change or fast enough to take advantage of huge opportunities that we have right now in the marketplace, trying to think the second part of your question was, i believe was matter to workforce. i kind of got empathic
liz farr
how they operate, how they operate,
jack flaherty
and how they operate is also very interesting. last week, i spoke with a couple of mid sized accounting firms, and they’re staying very traditional to the roots about quality, quality, quality, and for that reason, they’re less apt to try new methods, even if you know they don’t actually apply them to a client’s body of work, but test and play if we don’t start again, looking at the way that we operate, we go to market, both in the workforce, who’s doing the work and how we’re doing the work and what are the methods we’re doing work. you. uh, you’re going to get passed by because somebody’s going to be able to do it better, faster, cheaper. it’s just simple as that. you’ll exist to the point where you retire, but you won’t have a legacy, because you’re going to basically have a basically a dead accounting firm. if you look at the upper ranks and how you go to market when you’re connecting with an individual so often, you found that a partner, a director, a manager, they kept that trusted relationship with their client contact close to the chest, and if anybody called that person, they would ream them out over the phone, as though you just did something very detrimental to their child. however, what are we doing here? we are service providers. i worked a lot in healthcare. i really took to heart the phrase, i’m here to serve. i am not here to just make my money. i am here to make you better. and if i don’t have that tool, that skill in my tool belt, my wheelhouse, and yet, i’m not letting the person that could potentially unlock success for my client. i’m actually doing them a disservice, which to me, is worse than nothing at all. i’ve got a solution. i’m just not giving it to you. so by rethinking how we approach that, how we discover ideas, how we approach our clients. what that does? it puts you in that pinnacle trusted advisor slot. they’re not going to replace you with the new person. they’re going to say, pardon the phrase of my own name, you’re a jack of all trades, because you can bring me a solution i didn’t even know existed, and when you can be that person. but there is no greater role someone in accounting firm, or any professional service firm can be than someone’s truly best friend in the business world. and that’s my vision, how i work with clients, is be that kind of person. and if you do that, you will flourish, you will grow. and guess what? your workforce will love you for it. well,
liz farr
you know, i think that there, there’s a little bit of finessing you can do there not just to be the trusted advisor, but to be the trusted advisor team, so that your firm is that trusted resource. because the reason we’ve gotten into these silos is that all these partners and all the people at the top want to be that one trusted advisor, to be that one and only thing. but how can we get these people who are so siloed to see that taking a more collaborative approach helps everyone. that is what’s been lacking.
jack flaherty
i agree with that, reflecting on a conversation i had with a good friend of mine two weeks ago, mid sized firm he had taken, i don’t think they i don’t think the firm had ever had a client above, say, 500,000 fees. he took a client to over 10 million, and he did so by generously giving. he would bring people into the conversations, he would do whatever it took to make that better. and every human is different, but i do believe, if i was to generalize, when i’m having a problem, we have one person we call regardless of the problem, mom, mom, dad, colleague, whoever i’m having with x, because you want someone to think through that. so i do think it’s important to have someone that has that relationship. and believe me, i have given up relationships because i knew i was not compatible with my client, that person which had two different personalities, i’m kind of a big personality, and they weren’t. but when they have a compatible it’s like i’ve been best friends with them my entire life. so second to that, though, is if you’re a great, trusted advisor. help coach your colleagues to do so as well, but that that requires building a culture where people are open to having an objective conversation or discourse. i didn’t win that or i didn’t make that connection, or that call didn’t go well. well, let’s take five minutes and riff on it. are there any things you could have done better to do so i might help partners become partners by literally telling them how to sell. and for me, selling was always easy, because when i connect with somebody, i’m no longer thinking about my interests. if you need if you’re hungry, i provide you with lunch. it wasn’t a matter of me making sure that i get it 10% 20% 30% margin you need help, and i delivered to you at a price that, quite frankly, was acceptable to my firm. and so i share that knowledge. we can all get better, because none of us are perfect. third is that individual that sold a ten million plus projects, actually, no, not projects, multiple projects. what he told me in my conversation two weeks ago, he handed over the account to another partner. why? the other partner was strong at farming, building relationships, continuing to find new opportunities and nurturing a workforce to support it my colleague just has a special quality that he can immediately put his finger on the problem. i don’t know if that’s something that you can teach, you innately have. i think there’s an ability to cultivate that regardless of you know, your mature, your instinct on that. and so between him and the firm, they decided we’re not going to sacrifice your compensation because you just gave up massive book of business. you’re going to continue on as an advisor, but we would rather use your talents where they’re most valuable to the firm they align with our mission, our purpose. and this goes back to i mean, there’s nothing more than i love than an executive retreat, working with a bunch of partners and disarming the group, instead of us all coming to the round table as individual warriors, what is our each individual, unique skill set, and how do we come together better? cuz, if you’re a better farmer and i’m a better hunter, let’s figure out how to work together, because we all grow the value of the firm, more partners, more business, more happy clients, more happy employees. because when somebody’s doing a job that they are not good at, they are innately not happy, right?
liz farr
yeah, and i think you just kind of stumbled on one of the big things, one of the big secrets, which is to not just promote people up the ranks. this is another place we’re seeing disruption, but to actually create a new position for somebody based on their talent, which is what that firm did for your friend. yes, they, they didn’t say, well, just keep doing what you’re doing and full steam ahead and straight on to to dawn doing it that way. instead, it sound like they said, hey, you’re good at x. let’s keep you doing x. let’s create some place where you can just do x. so
jack flaherty
yes, i wouldn’t say that. they isolated him, they amplified him, and there’s a difference. i’ve had firms look to put me in certain boxes, and i never liked it, because i don’t like boxes, but what i do like is when you put me in a situation and everyone around me is stressed and thinks it’s high stakes, and i feel like i’m a kid in the candy store. i sold the two and a half million dollar product. it for a bank here in la. i couldn’t get a partner to come on site. it was, it was, it was a data governance project, and they weren’t comfortable with it. or what was not, this is my team that was there i built. it was an incredible team. i look fondly at them, we would go into the boardroom speaking with the cfo head of compliance. i mean, it was, you know, the executive leadership team, no doubt about it. and while i’m a technologist and i’m smart on data and those types of things, my my true strength is business as a strategy. and so by connecting with individuals in their domain, their forum, i got them to see what my team, what the client’s team knew it needed to happen, but they didn’t know how to connect the dots. that’s where i being able to take the spirit ideas and people and come together with a vision that we all agree upon, and we can all put our shoulders behind and when firms do that type of approach and let people flourish in their strength and not force feed them. sky’s the limit. the sky is the limit for every firm out there today.
liz farr
yeah, and not only will that, that will differentiate you from the crowd, and it will keep those brilliant people in your firm, because they get to do what they are geniuses at.
jack flaherty
who doesn’t want to do what they’re great at. i mean, i like to change. i like change. so that kind of has been my factor, but uncovering somebody’s strength and what makes them smile, if you love to dig ditches, that makes you smile. let me let you dig ditches all day long, cuz there weren’t people like that when i work with technology companies, and i know we’re not talking about technology, but i’m happy to pivot on that one, because i’ve got some big thoughts about the accounting industry on that one. but when i’ve worked with, you know, technology companies that are having challenges, you know, with their team building and and how to get back to a high performing team and retention and achieving their goals. i’ll start asking questions about who runs the team, far too often, similar to accounting, we take somebody who’s amazing at reconciliations, they know in their sleep, we take them out of their success, and we put them in a role that they are ill prepared to do, and then what do we do? we reprimand them. we reprimand them because we made a bad choice, not that they’re not the right person for the job. but if i send you into battle, and i don’t give you any of the tools or weapons, and i wonder why you lose, that person’s not the fool i am. that’s the decisions. when we are leaders, we have a vision and our purpose. we give our teams the strength the tools, frankly speaking, to win
liz farr
absolutely. now we’ve already talked about the the importance of decision making as a skill. sure? what are some other skills that accountants need to be successful now and in the future. well,
jack flaherty
self servingly, i’ll open the jacket a little bit more. my book, the decision switch, is actually comprised of seven principles, because decision making is a process, and it’s something that permeates everything that we do, and i truly believe it’s our most critical skill that determines our success and lays the groundwork for our legacy. but since it’s a process, it requires defining clear, concise goals, we don’t take the time to invest then we’re going to have people going in different directions, which we know is not the most efficient model collaboration. and collaboration isn’t just working arm in arm. it’s the ability to have open objective discourse. i wrote, you know, my linkedin post not too long ago about when did our skin get so thin? we don’t allow ourselves, i mean, we don’t allow ourselves to accept a comment that is anywhere below the equator of negativity versus positivity, if somebody comes with the slightest constructive criticism, we immediately become scared and secure and we lash back, versus taking to heart and maybe asking them a question back. be like, well, if that’s not going to work, what do you think would work? a simple conversation and getting different perspectives as part of that, it also serves to mitigate our personal biases, emotions, because we all know, i mean, i can’t tell you how many audits i found errors with because that’s the way we did it last year. so why don’t we just do the same thing again this year. well, if we carried forth the problem, we’re not going to find the solution. and so the last piece of this, and i don’t want to mind the water, so we clearly make a distinction between those pieces, or the select few principles of from my book to really where i see the industry going. we are seeing a convergence of technology and accounting and anybody in accounting. and i think i shared with you on a different masterclass we were together that i i had the interviewer nearly fall out of his chair when i made the statement because i said, not my vision for the future, but i’m not saying my big bet for the future is that technology organizations are going to cross the line into accounting. they were surprised. like, how can they do that? i’m like, well, accounting firms did it first when sarbanes oxley came out, who built the first platforms to manage controls be accounting firms. so if you’re telling me name your big erp, whether it be it’s from saps, oracles, even you know the ones that your small organizations may use what’s stopping them from creating a black box module that does real time reporting, that eliminates year end reporting where we can do closes in the matter of hours and not weeks, we will still need accounting firms to sign off on opinions, no doubt about it. but we need visionaries that, again, look at their clients and saying, how can i better service you, and if that means i gotta reduce my prices, because, you know, competition or i can do more faster that may happen. but you touched on something before, about changing pricing strategies. if you can do this in a purposeful manner, this is where you create significant value and you can truly go after value based pricing. and when you can approach clients with a value based pricing, you are putting a commitment on the table. i’m betting my team is that good, so i show confidence versus billing by the hour and saying, i think it’s going to be 2000 hours, but i’m not sure. right? people, more so than ever before, want confidence, and if you’re not willing to put your name, put a stick in the ground, and saying, i’m going to do this. and yeah, sometimes we’re going to eat our own lunch, great, but if we do it consistently enough, we build in these mechanical behaviors to allow us to do it successfully, because we have a track record that we can start referencing back to that’s right
liz farr
now, those are, those are all skills that we need, and a lot has been said and written about the new things that accountants need to master. but i think a better question is, what should accountants stop doing immediately,
jack flaherty
focusing on ai and automation told you i like to be a disruptor. we have all become so enamored by the shiny objects you. that we’ve failed to continue developing the basic skills of service. i want to speak to an audience of 1000s, if not millions, on this particular topic, your service provider, if you can’t build trust, if you can’t build a meaningful relationship, that there’s emotion transferred, i can anticipate and help you not stub your toe on something that i could have seen but maybe you overlooked. those are the types of relationships which, first of all, you’ll have a client for life. second of all, they’ll have the patience to allow you to fail occasionally, because you may propose an approach that’s a little bit out of the box, but because they have faith in you and they want to see you succeed, because a relationship is bi directional, if you have a client, it’s a little tangential, but if you have a client who’s always asking, asking, asking, you have to realize, stop for a moment, that that’s a transactional relationship. they’re just buying apples from you. that’s it take the time to have a partnership with your clients. but flipping that on a happy note, if you build partnerships with your clients, it levels out the resilience. you don’t really worry about the downtrends. you’ll get better references. you build your practice. you build better people, better retention. i mean, i cannot begin to there’s no end to my adjectives and positivities about taking an approach that builds meaningful relationships, because you sell more you become a more agile organization, become more decisive, and you’ll drive real shareholder value. and i think today, your audience might be smaller, a larger practices, but we know m&a is out there as well. i can help you drive value for your organization. regardless if you want to sell, i might give you reasons why not to sell, or reasons to sell, but to do so, i need to have a conversation with you, because practicing accounting and professional services like we did 40 years ago has diminishing returns, and i’m not saying shake the boat up completely, but be more mindful in your thoughts and your words, and i assure you you’ll have greater success.
liz farr
so so i think what you’re saying is let the ai and automation do what they can, but let’s us as humans do what humans are best at. ai can’t form relationships, but we humans can
jack flaherty
absolutely. ai is just another tool in the tool. stop focusing on it. stop fearing it. when the calculator came out, the accounting profession didn’t go away. no. so why are we thinking it’s changed? we just have another tool or two. well,
liz farr
that’s right. that’s right. now, what do you think keeps accounting firms from changing? and we’ve been told all the things that we need to do differently, but the firms you work with and the firms who don’t work with you, what is it that keeps them from changing?
jack flaherty
when i first started in accounting, a great story was shared. and it’s brief so i’ll keep it short. thanksgiving, your mother’s baking stuffing or whatever, some sort of mince pie. she takes out two pans, makes all the goodies for the for the meal, puts in the oven, cooks it, and serves it for dinner. young bobby comes over and says, hey, mommy, why do you make that in two pans? well, that’s how you grandmother taught me turn to grandma, hey, grandma, why’d you bake in two pans? because our oven was too small to have one. we innately want to rely upon the techniques that got us here. we failed to question. people think of that as a negative term. it’s not negative. i love my kids because they ask questions about everything. we fear questions as potentially disruptions. and you know, one of the firms discussing with right now, they built an incredible culture, an incredible firm, anytime anybody suggests new services, new approaches. wonderful founder, i can say nothing but great things about him always goes back to this is, you know, this is how i built the organization. this is how we got to where we are. and as with everything, you don’t bet the farm. you don’t bet every resource on making a huge leap, but taking 5% of your resources and doing some ab testing is is not going to harm your bottom line. and if one out of 20 projects actually does, well, that’s pretty good. i mean, if we use, you know the analogy to say baseball, if you’re a 300 hitter, it means you’re hitting a ball three times out of 10 if you’re a business owner, and three out of 10 of your tests work, well, baseball, you’d be in the hall of fame. so i think it’s just allowing yourself to be open to new ideas. and i know we’re probably going long in the conversation, but tying it way back to the beginning. how you engage and get a workforce for better words? i don’t you can use these words anymore, but that will die for you. ask them what they think, ask them for their ideas. you don’t have to go with all of them, but being open to those conversations shows your human being, and that endears people to you. when people are endeared to you, there’s not, pretty much anything that they won’t do for you. remember those days where we worked 18 hours a day?
i am
liz farr
now for my last question. i okay, i want you to get out your crystal ball and tell me, where do you see, the accounting industry in 10 years, the
jack flaherty
accounting industry in 10 years, i’ll go with my bold bets, but also my risks. accounting is going to become extremely niche. you’re going to find that even within a firm, you’re going to have to have individuals that not only understand the laws, the rules and regulations and everything else that goes with that. but that can connect with the types of personalities of that industry, because using a couple of good friends, a partner who is for better words, killing it in silicon valley is probably not the same partner that can service the wineries of napa, which are what, 60 miles away, right? the regulations, the temperaments, the personalities, are vastly different we need to look like and feel like who we’re working with. and that doesn’t mean caucasian to caucasian or hispanic to hispanic. it means we need to be able to read and understand the types of people that we’re engaged with. and again, goes back to connection, which goes back to, i’m keep going back to my message about purpose driven decisions. what do you define your firm as? what do you find your value as? what are your goals? and that makes you interested in wine or technology? you. so i think we’re going to become specialized, not just in the technical side, but on the interpersonal and people side. the other big bet is the conversions with technology. i’m not spoke well. i can’t 100% say that. i’ll just say i’ve been talking to all the accounting software developers out there, but the notion of them being able to build an additional module that they can license out to their clients, that can automate much of, you know, the financial close or taxes or whatever, because in abstract and a vacuum, accounting is nothing but zeros or ones. so we’re going to have some sort of change there. yes, we need to have assurance soc reports and those types of things to make sure that we can trust that solution. but as we go down that path, we’re gonna need individuals that are gonna be able to sign up for those financials. and the biggest risk that i called out about two years ago is the further we go down this road, the greater the risk that we have. because how long is our muscle memory? what i mean by that is 10 years. say, if just today we implement a new black box that did all the automated reconciliations who’s going to actually have the fundamental technical skills to back into that end number? because they might have not done reconciliations for 10 years, alright? and the funny example that i’ll use that i love sharing. it’s like when i taught my daughters. i taught my daughters math until they eclipsed my knowledge. but vividly in third grade, that’s when calculators get introduced. i made the same bet with both of them, because they wanted to use nothing, but calculators said, okay, it’s fine. if you do three problems and you get them right, here’s your present. it would be ice cream or something, or that daddy would run around the house. look like a fool out of some old, some foolish. you get it wrong if you get any of them wrong. i said, just one. oh, no, no. that was actually nice. i said, if you get all three wrong, you gotta do my way. i it was something that i tried to be gentle on it. in both cases, both daughters got all three questions wrong because they didn’t have a relative understanding that when you divide two numbers, the ultimate number should be smaller. i mean, i know we’re we can find, you know, they didn’t have relativity. and if we don’t have a relative understanding of what the output should be, there in lies, the risk that is in front of us so niching, not just technical and relationships, but with technology and making sure that we don’t forget what our purposes and how we drive drive value for our clients,
liz farr
those are all excellent predictions and and i hope that we managed to do that and i and i do like your trick with the numbers as an aside, one year when i was in high school, i decided to just not use my calculator at all because i wanted to build that muscle for doing division and multiplication, and i got really good at it.
jack flaherty
yeah, it’s sometimes you can map faster without a calculator exactly,
liz farr
exactly. now, jack, it has been great speaking to you. i’m so glad that we met a couple of weeks ago or months ago, whenever it was when we were on that in that other that other community. now if listeners want to connect with you, what’s the best way to find you?
jack flaherty
absolutely, i offer speaking, coaching and consulting, because to truly transform an organization. me, it’s not a one time conversation. you can find me. my website is the decision switch.com. my email is easy. jack flaherty at the decision switch. i do follow social medias. you can find links on my website. i don’t like to make this portion too long, but i encourage anybody that wants to have just an open discovery call i want to give, and i give freely, because that’s what builds meaningful relationships. so i hope your audience, whether new in their career or those middle or potentially at the at the end of them, i love hearing your stories, but i also love finding new ways for you to succeed.
liz farr
thank you so much, jack. i’m so glad that you came on and shared your intellectual capital with us.