Business Learning Blog

Recession drags on, but opportunities abound

We've heard all about the threats this recession poses to businesses, and frankly, we're tired of it.

Let's hear about the opportunities.

They're everywhere, if you believe Frank Ryan. He's a CPA, a Business Learning Institute instructor and president of a management consulting firm that specializes in turnarounds, crisis management, strategic planning and the like. He has a ton of ideas about how businesses can not only survive the recession, but actually set themselves up to thrive once it ends.

In a recent phone interview, he offered up these tips:

• Manage your "financial capacity": That's all of your available assets -- checking accounts, accounts receivable, inventory, equipment. Ryan says businesses need to "walk the balance sheet" on a regular basis, understand what they have on hand and get a handle on their debt. "What was taken for granted before -- cash availability -- has to be more deliberately planned than it was before," Ryan says.

• Be even more open and honest with your lenders than usual. "Banks love good news and aren't happy about bad news, but they hate surprises," Ryan says.

• Turn your suppliers into valuable parts of your operation. Explains Ryan: "I rarely approach a supplier and say, 'I need you to cut costs.' What I do say is, 'I'm approaching the market from a different perspective; do you want to participate in this with me?' The smart company that deals with its suppliers as if they are a valuable part of the operation is one that will survive and thrive in the long run."

• Develop criteria for what makes a good customer. Here's a hint: It's not just someone who will buy your product. "Just because someone is willing to buy your product doesn't mean you should sell to them," Ryan says. "A good customer (should be) someone who is willing to pay a reasonable price, and who knows what he or she wants."

• Renew your commitment to your employees. Laying off talented employees to cut costs is a lousy strategy, Ryan says, because the people you lay off today will be working for your competitors when the economy finally recovers. "Businesses made a fatal mistake about 15 to 20 years ago when they convinced their employees that they're expendable," he said. "I encourage companies to convince employees that they're not. Create an environment in which it's worthwhile for an employee to stay around for a long time and make a career there."

Finally, and perhaps most importantly, be honest, trustworthy and ethical.

"Now's the time for all of us to deal honestly with one another," Ryan says. "Integrity is of the greatest importance. People need to be able to trust one another in business. We've heard comments about corporate greed, about excessive pay, about all sorts of irresponsible activities. The reality is it's about personal responsibility and integrity. One of the great things that's come out of all this is that people are starting to pay attention to that again."

• Listen to our conversation with Ryan in its entirety as part of this CPA Spotlight podcast.
• Subscribe to our podcast here, or search for "CPA Spotlight" in iTunes.

What are you doing to position your company to thrive in the post-recession world? Think about it, then check out these related resources:

• Surviving the economic downturn with Frank Ryan, CPA
• Economic recovery's in the air. Can you smell it?
• The MACPA's Economic Crisis Resource Center

Business strategy at the Expo
Ryan will be among the presenters at the second annual Maryland Business and Accounting Expo, scheduled for June 16-17 at the Baltimore Convention Center. Get complete details and register for this groundbreaking event here.

Surviving the recession? It's a matter of trust

Welcome to the recession, where your worst business nightmares come true. Consumers don't buy. Customers don't pay. Lenders don't lend. Investers don't invest.

And companies? Why, they expand, of course.

I know what you're saying: "What are you smoking, Bill?" And I don't blame you. Each day brings more news of layoffs and cutbacks as business after business assumes the fetal position and waits for the sun to come out.

And when the recovery comes? They'll climb out of their bunkers and find themselves short on staff, short on resources and woefully behind those who took Mark Slatin's advice.

Slatin is president of True Colors Consulting, which help its clients improve sales performance through executive coaching, consultation and sales training. And he believes the companies that will survive the recession and thrive afterward are the ones that are positioning themselves now for long-term growth.

And how are they doing that? By looking outward -- not inward -- for solutions. Stop focusing on your own woes and start focusing on your clients' problems. Help your customers position themselves for post-recession growth, Slatin says, and you'll be doing the same for your company.

"Hug your best customers," Slatin says. "Be proactive with ideas for how you can help them achieve their goals. And remember, no idea is too small."

Next, Slatin says, continue to invest in your sellers -- "the people who are doing business development at your firm," he says. Train them. Coddle them. Give them the resources they need to succeed.

Most of all, remember that "sell" is not a four-letter word.

"I call it the invisible wall of distrust," Slatin says. "It's been created from years of false promises and with the mortar of incompetence. No matter how much the last client sung your praises, when you walk into that room across from a buyer for the first time, there is an invisible wall there. Professional service firms want to get as far away from that stereotype as possible."

In the end, Slatin says customers buy from people they believe are trustworthy.

"In professional services in particular, people should think about developing relationships rather than closing the deal," Slatin says. "That's the paradox of selling: The less we work to make the sale and the more we make trust the goal, the more successful we are at business development."

How do you build that trust? Simple: By listening. Slatin channels none other than Stephen Covey himself when he says, "Make sure people feel as though they are understood. 'Seek first to understand, then to be understood,' right?

Slatin has lots more to say on the subject, and he says it all in a recent CPA Spotlight podcast.

• Listen to the podcast here.
• Subscribe to our podcast here, or search for "CPA Spotlight" in iTunes.
• Visit our online Economy Resource Center.

How are you positioning yourself and your clients to take advantage of the economic recovery?

Find out more here
Slatin is now teaching a Business Learning Institute program called "Trust Centered Selling: How to Attract and Retain Loyal Clients through Trusting Relationships." That program is available via customized on-site training.

It's time to kill the billable hour

CPAs are knowledge workers, right? The value they offer their clients is in their knowledge, their expertise.

So why are they still billing by the hour?

That's what Ron Baker wants to know.

Ron is the founder of VeraSage Institute, a think tank dedicated to teaching a concept called "value pricing" to professionals around the world. He's been doing a lot of thinking lately about the notion of value. To wit:

What does the billable hour imply? It implies that your time -- not the knowledge you offer your clients, but your time -- is what's valuable. And Baker believes that in today's professional services firm, that type of metric is obsolete.

"(The billable hour) misaligns the interests of the CPA and the client," says Baker. "The CPA's incentive is to bill the most hours, but the clients don't care about the hours; they want the work done right. Customers want outputs and results. ... Tracking the input in terms of hours says nothing about the value of the output."

Baker's pricing model emphasizes value over time, and he calls those who are using it "firms of the future." Really, though, there's nothing futuristic about them. They've merely done enough forward-thinking to get rid of an antiquated pricing model and replace it with one that makes sense.

Let's think of it another way -- this time, in terms of efficiency vs. effectiveness. According to Baker, firms that charge by the hour are models of efficiency, but they're nowhere close to being effective. You know who's effective? Organizations like Google, where employees are expected to spend 20 percent of their time -- or one full day a week -- experimenting with innovative projects. Some of those projects go nowhere. Some end up setting the world on fire. The point is, Google's employees never know which ones will work until they start playing.

That's horribly inefficient, but in the long run, it's tremendously effective. And it's the kind of example professional service firms should be following. Forget about your time, says Baker. Instead, create value and charge accordingly.

I could try to make sense of this all day, but Baker is way more eloquent on this subject than I am, so let's listen in as he talks about value pricing and firms of the future in this MACPA podcast.

• Listen to the podcast here.
• Subscribe to our podcast here, or search for "CPA Spotlight" in iTunes.

What do you think of Baker's ideas? Let us know, then check out these related resources:

• "Pricing on Purpose" (a Business Learning Institute program)
• Baker's books on pricing (available as free downloads on the Verasage Web site)
• Maryland Business and Accounting Expo, July 16-17, Baltimore (Baker will be speaking!)

Hear that? It's the sound of peace among generations

A new year brings with it a lot of the same old problems for CPAs at firms and companies across the nation.

Right at the top of the list are staffing concerns. And running in tandem with that, of course, are generational issues. We’ve got four generations working side by side in the office these days. Each has its own way of doing things, so the question is, how do we get 'em all to play nice?

Lin Kroeger says the answer might be as easy – and as hard – as listening. As with so many other things, the key to solving our generational issues, Kroeger says, is in communication – listening to each other, talking about our expectations, having real conversations about why what we do matters.

"We have to spend a lot more time talking and getting people to talk," says Kroeger, a management consultant with PWD Consulting and an instructor with the Business Learning Institute. "(The generations) are going to get along better when there is more opportunity for conversation and when everybody knows how to participate in that conversation to drive the business forward.

"One of the opportunities businesses are not taking great advantage of in that conversation is talking about what truly matters at the business – what turns them on, what makes a bigger difference to society at large if we do a great job," Kroeger adds. "Each generation likes to make a difference, and we need to have that discussion as often as we can so that (our work) is not about a bunch of tasks. It should be about creating something that actually makes a difference to someone and, perhaps, to society at large."

I spoke with Lin on the phone recently, and she offers lots of other great generational advice in a recent CPA Spotlight podcast.

• Listen to the podcast here.
• Subscribe to the podcast here, or search for "CPA Spotlight" in iTunes.

Want to find out more? Check out Kroeger's related BLI seminars:

• Sharing Skills Between Generations
• Leadership and Generations: What Are They Thinking?

What's your best advice for calling a truce between workforce generations?

Does training seem like a luxury when you are trying to keep your business running?

Below are my top five reasons to not cut training in a down economy:

1. Employees who are learning and growing tend to stay with a job or company longer.
2. Trained employees help to grow your bottom line with enhanced skills and increased efficiencies.
3. Training does not have to be expensive and can be done at your location with on-site training, webinars, webcasts and podcasts.
4. Linking training to your overall strategy and tailoring the training to your specific business needs will help you to get the most out of your training dollar.
5. A well-trained staff will actually help you to become a lean organization, as ideas on how to improve business strategy and processes will help grow your company.

An article from the American Society for Training and Development illustrates how a commitment to learning and training helped several American companies weather the last economic downturn. Position yourself right and you will be able to leapfrog ahead of the competition when we emerge from this recession.

The article reads, in part:

“Companies that continue to invest in training in a down economy will actually see a big rebound when they come out of it,” predicts Marsha Lindsay, president of Madison, Wisconsin-brand consultancy Lindsay Stone & Briggs. “They’ll see greater productivity and greater loyalty, and they will be the ones attracting the best people when the economy turns around."

Read the article in its entirety.

The consultants at the Business Learning Institute can help you be more efficient in the way you spend your training dollars. We can actually save you money while developing your employees and growing your business.

How will your company be positioned when the economy rebounds? Will you have the trained staff to take advantage of importunities?

BLI, Shapiro form training partnership

The Business Learning Institute and the Shapiro Negotiations Institute have developed a partnership whereby each will leverage their combined expertise, distribution and intellectual property to better serve their clients. 

BLI’s offers its clients more than 150 programs in the areas of strategic management, business management, performance management / measures, leadership development and communication skills.  BLI has presented its program to clients such as MicroSoft, Black and Decker, and hundreds of accounting firms throughout the United States.

SNI specializes in the delivery of negotiation and influence training and consulting. SNI has presented its negotiations programs to tens of thousands of people on six continents. Its clients include General Motors, Verizon, Bank of America and PriceWaterhouseCoopers.

Get further details about the partnership here.

Top 5 mistakes in implementing new auditing standards

If you’re an auditor, chances are you’re grappling with the slew of new auditing standards that have been implemented recently.

• There’s Statement of Auditing Standard 103, a documentation rule that requires auditors to document their work so that it can be recreated by third parties.
• There’s SAS 112, which requires auditors to report material deficiencies and weaknesses in internal controls to their clients in writing.
• And there’s Statements of Auditing Standards 104-111, the new risk assessment standards that ask auditors to consider the risk that a plan’s financial statements may be misstated and to design their audit steps so that the risk of misstatement is reduced.

Lots of new complexity to deal with. And not surprisingly, some auditors are making lots of mistakes as they try to comply with the standards.

Jennifer Louis has been documenting those mistakes and teaching CPAs how they can avoid them …and conduct better audits in the process. Louis is president of Emergent Solutions Group, which offers training specifically for financial and accounting professionals. She is also an instructor with the Business Learning Institute, where she teaches a number of programs, including one titled, “Integrating the New Risk Assessment Standards into the Audit Process.”

In this MACPA podcast, Louis identifies the top five mistakes she believes auditors are making with regard to the news standards. Those mistakes are:

1. Relying too much on standard audit tools and not really understanding how to assess specific risks.
2. Failure to hone in on the biggest risks for specific clients. Some auditors don't identify anything as a risk, while others identify everything as a risk.
3. Thinking of the audit at the transactional level, rather than seeing the big picture of what's going on after a transaction occurs.
4. Relying too much on clients' internal controls when those controls haven't really been tested.
5. Not adjusting audit procedures to align with the level of audit risk.

Listen to the podcast in its entirety to hear Louis' take on these mistakes -- as well as her advice for how to avoid these mistakes in future audits.

• Subscribe to our free weekly podcasts here, or open your copy of iTunes and search for "CPA Spotlight."

Learn more at the Expo
Louis will lead a pair of programs -- a Sarbanes-Oxley update and a look at internal controls -- at the first-ever Maryland Business and Accounting Expo, slated for June 17-18 at the Baltimore Convention Center. Get details about the Expo and register here.

Top 5 ways to have an impact with training in 2008

Chief Learning Officer Magazine's A Look Ahead: The Training Industry in 2008 identifies the top training activities with the most impact in 2008 in its annual business intelligence column. Here they are:

1. Competencies
2. Leadership Training
3. Instructor-led Training
4. Measurement
5. Compliance Training

Competencies and Leadership Training have risen to the top in the last few years due to the talent crunch and pending wave of boomer retirements. The other major finding was the increased support by upper management of training initiatives. Susan Lee noted,"More companies realize that training can create higher performance and can be an enabler of corporate strategy and transformation." The report gave an optimistic outlook for training in 2008 citing the need for "employee development" and "train to retain" as major drivers of training. The newest member of the top 5 is compliance training. Another area we see Corporations and CPA firms investing in. The proliferation of changes in rules, regulations, and accounting standards combined with the increasing regulatory scrutiny make this a priority.

By the way, competencies and leadership training are key retention tools for the new generation...

Do you agree with these? Are you working with Competencies yet?

Jumpstart your strategy through training

Is the business environment in which your company or firm operates more or less turbulent now, compared with five years ago? How are you dealing with globalization, changing business models, new technology, workforce shortages, and more demanding customers and clients?

These rapidly changing times require more leadership and more understanding of the "big picture" than ever before. I find that more and more, organizations need stronger leadership and strategy skills deeper in their organization than ever before. Yet few organizations are making the investment in their human capital to get these skills. Those that do are building intellectual capital at rates far faster than those that do not. That capital will ultimately turn into competitive advantage.

So how do you actually do this?

It is about linking your strategy to the priorities of your business and building a learning / training plan that will deliver the right competencies (knowledge, skills and abilities) to the right people in your organization to get the best (and most strategic) results.

Let me give you a simple example:

In the CPA Vision project, the CPA profession identified five critical competencies necessary to thrive in a rapidly changing, global world. These competencies are:

1. Communications and leadership
2. Strategic and critical thinking
3. Focus on the customer, client and market
4. Interpretation of converging information
5. Technologically adept

At the highest level, you would follow these steps:

1. Evaluate these skills against your organization's strategy and priorities.
2. Prioritize the competencies that have the highest leverage for your business.
3. Assess your team against these critical competencies.
4. Develop a training / learning plan to fit these competencies.

You can read more about this in an article I did for SmartCEO magazine's "Big Idea" issue. Download the article here.