1. Peak Performance: How the Best Get Better
DFK North American Annual Conference 2015
The Ritz-Carlton, Grand Cayman
Thursday, October 22, 2015

2. OBJECTIVES
To share with delegates how a culture of Accountability is crucial to becoming a World Class Firm.
To ensure that delegates actively participate and share openly.
To have each delegate leave the meeting with some action items for implementation .
John F. Kennedy

3. A little about Phil Whitman
CPA
Chicken Man
18 years running professional service firms
Started Whitman Business Advisors in 2008
Recently Named Most Recommended Consultants by Inside Public Accounting
Married to Mia
Three sons, Charlie, Jake and Alex

4. The Four Pillars of a World Class Firm

5. Definition of “World-Class”
ADJECTIVE ranked among best in world: ranked among the best or most prominent in the world Thesaurus Synonyms: first-rate, first class, superlative, topnotch, outstanding

6. Bringing in new clients
INDUSTRY ISSUE
Bringing in new clients
Top 5 issue for firms with 21+,11-20, and Sole Practitioners

7. Developing a Succession Plan
INDUSTRY ISSUE
Developing a Succession Plan
Top 5 Issue for firms of all sizes

8. Finding & Retaining Quality Staff
INDUSTRY ISSUE
Finding & Retaining Quality Staff
Top 5 issue for all but sole practitioners

9. Seasonality/Workload Compression
INDUSTRY ISSUE
Seasonality/Workload Compression
Top 5 Issue for firms of all sizes

10. Partner Accountability/Unity
INDUSTRY ISSUE
Partner Accountability/Unity
Top 5 Issue for firms of 21+ professionals

11. Changing Regulation INDUSTRY ISSUE
Top 5 issue for 2-5 professionals & sole practitioners

12. Retention of current clients
INDUSTRY ISSUE
Retention of current clients
Surprised? Not a top 5 issue!

13. Fee Pressure/Pricing of Services
INDUSTRY ISSUE
Fee Pressure/Pricing of Services
2011 PCPS CPA Firm Top Issues Survey
Surprised? Not a top 5 issue!

14. What issues are you hearing from your staff?

15. What I typically hear from your staff…
Too many things are not followed through on and there are little or no consequences set forth.
Bonuses/raises are not tied to performance.
There is little feedback on performance except once a year at my annual review.
We don’t always do what we say we are going to do.
Firm is divided between audit and tax, the teams have poor communication and should mesh better for such a small firm.
There is too much finger pointing and negativity when an error occurs.

16. Staff comments continued…
Communication can be improved at all levels of the firm.
Sometimes the entire staff knows something before the partners decide to talk about it.
There are instances when people are not direct when they have something that needs to be communicated.
Firm does a poor job of communicating…partners come across as “bothered” when employees drop in to ask them questions.
Tasks & goals are not laid out clearly for staff.
With the exception of this survey, opportunities to talk about the firm were never given.

17. Staff comments continued…
I feel the firm would be more motivated and exciting to work for if they had goals and incentives to work towards.
We use metrics to measure realization and utilization however bonuses or raises are never tied to these.
I have no idea how raises or bonuses are derived.
It seems that there is not much differentiation between good performers and bad performers.
Constructive criticism comes only once a year in my evaluation.
Career development is weak. We need more training.

18. The Iceberg of Ignorance
Manager Awareness 9%
Partner Awareness 4%
Supervisor Awareness
74%
Staff Awareness
100%
a study done in 1989 by Sidney Yshido called  The Iceberg of Ignorance.  It was research which suggested that senior level management is often so far removed from day-to-day business operations that they fail to understand the systems and processes that affect both employees and customers.  The most alarming result of this study suggests that this Iceberg of Ignorance can have an impact on company profits by as much as 40%!
The study concluded that executive level managers were only aware of 4% of day-to-day problems, department managers were only aware of 9% of problems, employee supervisors knew of 74% of problems but the front-line employees knew 100% of problems that affected the quality of products or services that were being delivered to customers.

19. What issues do you hear from your partners?

20. What your partners are saying…

21. What your partners are saying…

22. What your partners are saying…

23. What your partners are saying…

24. Best partner comment I heard…
It is vital that the firm develop a strategic vision for the firm, align its partners and staff with the vision and develop an action plan to implement. Further, we must monitor and hold individuals accountable.

25. The 1st Pillar of a World Class Firm

26. Exercise In your own words…definition of trust
Trust, like love and happiness is difficult for people to explain in clear, rational terms. This often makes us very bad trustors.

27. TRUST IN LEADERSHIP
A crucial requirement of leadership is the ability to earn the trust of others.
To trust a leader does not mean that one always agrees with him or her.
Trust is the conviction that the leader means what he says and cares.
Managing the Professional Service Firm: David H. Maister
There is a difference between trust and a difference of opinions.

28. The Trusted Advisor: David H. Maister
Trust Grows
The Trusted Advisor: David H. Maister

29. TRUST
Trust is both Rational & Emotional

30. TRUST
Trust is a Two-Way Relationship

31. TRUST
Trust Entails Risk

32. TRUST
Trust is Personal

33. Quote about creating Trust
“The leaders who work most effectively… never say "I". And that's not because they have trained themselves not to say "I". They don't think "I". They think "we"; they think "team". They understand their job to be to make the team function. They accept responsibility and don't sidestep it, but "we" gets the credit. This is what creates trust…”
Peter F. Drucker

34. TRUST
The degree of confidence you have that another party can be relied on to fulfill commitments, be fair, be transparent, and not take advantage of your vulnerability.
Robert F. Hurley, The Decision to Trust
Confident reliance in another party, whenever an uncertain situation entails some vulnerability or risk.

35. The Distrust – Trust Continuum
Without trust, people are more anxious and less happy. Leaders without trust have slower and more cautious followers; organizations without trust struggle to be productive.

36. "Our distrust is very expensive."
Quote about Distrust
"Our distrust is very expensive."
Ralph Waldo Emerson

37. The powerful effect of trust is that it enables cooperative behavior without costly and cumbersome monitoring
Micromanagement creates Compulsive Mistrust

38. What happens?
In important matters, when we decide to distrust, a relationship usually ends or continues under duress unless it can be repaired.
Example: Your firm has just announced that it is merging with another firm. You tell your people that their positions are safe. How much energy do they put into making the merger work versus actively seeking other job opportunities?

39. Fortune Magazine
The primary measure used to select its annual list of Fortune 100 Best Companies to Work For is Trust.
In these companies, employees acknowledge that change brings inevitable uncertainties, but nonetheless, they have a sense of comfort that they are acting in concert with their co-workers and pulling together toward a common goal.

40. How do you measure trust in your firm?

41. How do you measure trust in your firm?
Is there a high degree of trust in the firm?  
Do people in your firm follow-through with what they commit to?
Do people in your organization freely share quality information between each other?
Is the behavior of your managers and leaders predictable and positive?
Is performance feedback a regular and on-going part of your reward and recognition process?
Are gossip and the grapevine the primary way people know what is going on in your organization?
Do people discuss disappointments in an open and responsible way?
Trust reserves will run low if what people say and what they do are incongruent. Follow-through builds Trust.
People who withhold information are often viewed by others as untrustworthy and self- serving.
Leaders that exhibit aggressive, inconsistent, or passive-aggressive behaviors hurt trust from the boardroom to the break room. Reward positive, constructive, helpful and consistent behavior.
Employees who know how they are doing and who believe managers and supervisors are invested in their success will fill your organizational trust tank to overflowing.
Quality information that is formally and consistently shared build's trust by reducing employee concerns. It also softens the walls between people invested in "Us and Them" thinking.
People who have no way to discuss disappointments openly with management will often resort to "coffee-clutch" discussions and undermine trust between employees and leadership.

42. Center for Creative Leadership
A world leadership survey indicates that only 30 percent of employees ages 25 to 35 trust the people they work with “a lot,” versus 45 percent for employees ages 36 – 65.
The survey was conducted in January 2009…data suggest that younger generations are increasingly less trusting.
This has a major impact on retaining talent and building effective organizations.

43. Tips to Building

44. The 2nd Pillar of a World Class Firm

45. Communication

46. COMMUNICATION

47. Effective Communication
Effective communication is a two-way process - sending the right message, that is also being correctly received and understood by the other person(s).

48. Different ways we communicate

49. 2 Questions Is communication excellent at your firm?
Do the owners communicate with each other?
George Bernard Shaw

50. Quote about Communication
“The single biggest problem in communication is the illusion that it has taken place.”
Typically when excellent communication takes place it is very easy to be a “one firm” firm!
George Bernard Shaw

51. WHAT KIND OF FIRM IS YOURS?

52. The 3rd Pillar of a World Class Firm

53. Alignment of Goals
Goal alignment is critical for business success. It ensures that each person within your organization can see the direction for the business and knows how their job fits in with the “Big Picture”.

54. Alignment of Goals
To achieve goal alignment at your organization, you must first clearly communicate strategic business objectives across your entire company

55. ALIGNMENT OF GOALS

56. How do you ensure Alignment of Goals in your firm?

57. Quote about Alignment
“When you are in alignment with the people around you, you are much more likely to travel in the same direction and avoid hidden agendas.”
Mitch Thrower
Source: "The Attention Deficit Workplace" by Mitch Thrower

58. The 4th Pillar of a World Class Firm
Everybody, Somebody, Anybody, And Nobody
 This is a little story about four people named Everybody, Somebody, Anybody, and Nobody.
There was an important job to be done and Everybody was sure that Somebody would do it.
Anybody could have done it, but Nobody did it.
Somebody got angry about that because it was Everybody's job.
Everybody thought that Anybody could do it, but Nobody realized that Everybody wouldn't do it.
It ended up that Everybody blamed Somebody when Nobody did what Anybody could have done

59. The Four Pillars of a World Class Firm
Culture of Trust
Excellent Communications
Alignment of Goals
High Accountability

60. DEEP DIVE into…

61. The Four Pillars of a World Class Firm
Culture of Trust
Excellent Communications
Alignment of Goals
High Accountability

62. One of the most Critical Keys to Peak Performance and Success
Accountability
One of the most Critical Keys to Peak Performance and Success

63. Accountability In your own words…definition of accountability
Trust, like love and happiness is difficult for people to explain in clear, rational terms. This often makes us very bad trustors.

64. Some things I’ve heard…
Accountability is an obligation or willingness to accept responsibility Accountability is nothing more than following through with your commitments and responsibilities Accountability is simply doing what you know you should do

65. Roger Connors and Tom Smith
ACCOUNTABILITY
Webster’s definition of accountability:
“subject to having to report, explain, or justify; being answerable, responsible.”
“A personal choice to rise above one’s circumstances and demonstrate the ownership necessary for achieving desired results – to see it, own it, solve it, and do it.”
Roger Connors and Tom Smith

66. Everybody, Somebody, Anybody & Nobody
This is a little story about four people named Everybody, Somebody, Anybody, and Nobody.
There was an important job to be done and Everybody was sure that Somebody would do it.
Anybody could have done it, but Nobody did it.
Somebody got angry about that because it was Everybody's job.
Everybody thought that Anybody could do it, but Nobody realized that Everybody wouldn't do it.
It ended up that Everybody blamed Somebody when Nobody did what Anybody could have done

67. What is the impact of greater accountability? Why bother?

68. Commitment + Accountability =

69. Greater Accountability =
Increase in Top Line Increase in Per Partner Net Income Ability to give larger raises Ability to hire faster Ability to fire faster Ability to …

70. Who has tried to implement a policy of accountability. What’s worked
Who has tried to implement a policy of accountability? What’s worked? What hasn’t?

71. How Accountable are you?

72. It Starts at the Top! Managing Partner Accountability
Leadership Opportunities Vision/Mission Partner Productivity Client Service Growth – organic/acquisition - people – revenues – net income

73. How do you measure Accountability ?

74. Steps & Milestones

75. A thin line separates failure and success, greatness and mediocrity.
the Steps to Accountability include in chronological order: See It, Own It, Solve It, and Do It. The first step, See It, means acknowledging the problem; to Own It is to assume responsibility for the problem and the results; Solve It means to formulate solutions to remedy the situation; and, as a culminating step, Do It commands the practical application of the solutions identified.
Below The Line is where the self-professed victims play The Blame Game. Here, crippling attitudes such as Wait and See, Confusion/Tell Me What To Do, It's Not My Job, Ignore/Deny, Finger Pointing, and Cover Your Tail are rampant. Though majority of the people found in this dimension are weak in accountability, this does not mean that very accountable individuals are exempt from falling Below The Line. They, too, slip every now and then. The only difference is that they know how to get out of the rut.

76. Accountability Continuum
Victim
Accountable
Where do you stand?
Blame others
Make excuses
Wait, and hope things change
Acknowledge
Look in mirror
Find solutions

77. Above the line…See it ! See It, means acknowledging the problem
The Oz Principle : Getting Results Through Individual and Organizational Accountability By Roger Connors, Tom Smith, and Craig Hickman

78. Above the line…Own it !
Own It is to assume responsibility for the problem and the results
The Oz Principle : Getting Results Through Individual and Organizational Accountability By Roger Connors, Tom Smith, and Craig Hickman

79. Above the line…Solve it !
Solve It means to formulate solutions to remedy the situation
The Oz Principle : Getting Results Through Individual and Organizational Accountability By Roger Connors, Tom Smith, and Craig Hickman

80. Above the line…Do it!
Do It commands the practical application of the solutions identified
The Oz Principle : Getting Results Through Individual and Organizational Accountability By Roger Connors, Tom Smith, and Craig Hickman

81. Below the line…
Playing The Blame Game and crippling attitudes such as:
Wait and See
Confusion
Tell Me What To Do
It's Not My Job
Ignore/Deny
Finger Pointing
Cover Your Tail
The Oz Principle : Getting Results Through Individual and Organizational Accountability By Roger Connors, Tom Smith, and Craig Hickman

82. How do you know when people are not being accountable?
What are the behaviors you see? Why? What have you been talking about for five years?

83. CREATING A CULTURE OF ACCOUNTABILITY IS SIMPLE…
S = Set Expectations
I = Invite Commitment
M = Measure Progress
P = Provide Feedback - coaching
1. Define clear results within your organization 2. Define the actions required to achieve the results 3. Identify the beliefs that produce these actions 4. Create experiences that instill the right beliefs
L = Link to Consequences – Carrot v Stick
E = Evaluate Effectiveness & Adjust

84. SIMPLE - ACCOUNTABILITY SUCCESS Model
Firm
SUCCESS
VALUATE
RESULTS
ACHIEVE
GOAL SETTING
Set Expectations I
MEASURE
PERFORMANCE
nvite Commitment P
rovide FEEDBACK
REFINE
Individual L
Ink to results
COACH
© Whitman Business Advisors LLC

85. EXERCISE
How many hours/minutes do you spend?

86. HOW MUCH CAN YOU SQUEEZE INTO A DAY?
Exercise
30 minutes
Personal grooming
45 minutes
Time with children
4 hours
Reading newspapers
Pets
50 minutes
Housekeeping/chores
1-2 hours
Work
7-10+ hours
Commuting
1.5 hours
Errands
Up to 2 hours
Grocery shopping
20 minutes
Cooking/eating dinner
1 hour
Entertaining
Dental care
18 minutes
Sex/Intimacy
General time with spouse
6 hours
Volunteering
Time for you
Reading a book
15 minutes
Spiritual development
Sleep
7.5 hours
41.3 hours
36 to 41 hours in a day

87. I don’t have time for this!!!
If you can recapture 10 minutes of wasted time per hour…
Assume a 10 hour day = 100 minutes/day
Times 5 days/week = 500 minutes/week
Times 48 weeks = 24,000 minutes/year
24,000/60 = 400 hours
Assume you earn  $80,000 annually and your total hours are 2,000; so, you earn  $40/hour.
Now that you have 400 extra hours, you only have to work 1,600 hours; so, your effective hourly rate is  $50/hour ( $80,000/1,600).
A  $10/hour increase over your original rate of  $40/hour is the equivalence of a 25% raise!

88. What would you do with an extra 400 hours each year?
That’s almost 17 days of time you gain…
Family time
Exercise
Sleep
The choice is yours!

89. EXERCISE
Set one goal on how you are going to use this extra time I just found you…

90. If Goals are SO important, why don’t more people set them?
They don’t know the importance of goal setting.
Most people don’t know how to set goals.
Sometimes people don’t set goals because they are afraid of failure.
Goals require people to leave their comfort zones.

91. GOAL SETTING Start with the end in mind Major goals Mini goals
Deadlines
Pad projected completion dates
Under-promise/over-perform
Make it visible
Delegate & follow up

92. GOAL SETTING SMART GOALS Specific Measurable Attainable
Relevant & Realistic
Timely

93. Exercise:
Goal/Accountability Setting: Identify one area in your firm that needs attention
Geography Upgrade Staff Increase realization Develop new business Identify Future Leaders Succession Planning

94. EXERCISE Example
Three things I would do if I had more time… One year from now I will run the NYC Marathon and complete it in under 3 ½ hours. I will do this by following a regimented training schedule each week. I will originate $250,000 of new tax work that is represented by at least 6 new clients by 6/30/15. To do this I will meet with one new prospective client every week. I will hire 3 consultants with CPA firm experience by 12/31/15. I will do this by meeting with 1 COI each week and will ask for referrals of the best and brightest they have worked with.

95. Framework of Partner Accountability

96. Partner Accountability
Partner to Firm
Profitability
Practice development
Partner to Partner
Good Citizenship
Partner to Client
Client satisfaction
Partner to Staff
Supervision
Training
Coaching
Contribution to success of others
Partner to Family & Self

97. Partner Accountability
Business Development
Client Service
Team Development
Leadership
What are the Challenges
What are the Benefits
How do we Measure
Rewards vs Consequences

98. Resistance Factors & How to Overcome them

99. The Ultimate

100. Action Items WHAT BY WHEN BY WHO Resources Needed? Smart Goal Setting
Build Accountability Framework
Roll-out & Communicate
Partner Productivity Plans
Partner 360s
What more can I do?

101. YOUR PRACTICE MANAGEMENT RESOURCE
OUR SIX PACK+ of SERVICES for CPA FIRMS
Retreat Facilitation
Mergers & Acquisitions
Lead Generation Services
Talent Acquisition
Leadership Development Coaching
Practice Management Consulting

102. ARE YOU A SIX PACK CPA FIRM?
A Practice Management Bootcamp!
Recruitment & Retention
Realization & Utilization
3. Training & Coaching
Business Development
5. Leadership Development
6. Succession & Transition