Pollen and the Professions

What’s in the Wind in the Accounting Profession?

A question posed recently by an accounting profession publication

I was recently asked to answer the question of What’s in the Wind in the Accounting Profession? I believe such questions are naively complex. I feel it leads to a drumming simplification of MeTu (aka me too) thinking. The collective of the various professional press and media along with national and state association leadership tends to rework an all too common concert of sound bites and feel good Kumbayah designed to placate the rank and file while providing a spin that there is something significant just around the corner if we could just stretch a little. This pandemic of Pabulum for the Professions eventually annoys even the most infrequent of listeners.

Now that I have that off my chest, I will share the following thoughts of What Should be in the Wind in the Accounting Profession? In my view, what is (and should be) in the wind is simply Pollen.

Profits over Production: The debate about effectiveness (doing the right things) over efficiency (doing things right) is over. The corollary is that firms need to focus. Focus on profits over production. Focus on Results over efforts. Firm leaders need to focus on profit improvements over gross billable hours. Customers do not care about the hours one works; they care about the results that are delivered. Effectiveness is far more superior then efficiency.

Efficiency is always a ratio and never, in and of itself, ever an output. FedEx is far more effective then the postal system. In order to be effective, they had to seek better outcomes and certainly FedEx improved its efficiency in the process of effectiveness but envision that FedEx designed a package system but still used the Pony Express instead of a fleet of planes? The result would have been highly efficient (they know where each and every package {and its horse/rider} but it would have failed as it is ineffective today to transport packages in such a manner. In essence, firms need to stop orgasming over top-line growth and instead need to focus on profit improvement.

Opportunities Abound: True professionals are naturally observant: Too many firm leaders look at their markets as closed pools of opportunities. They naively seek growth at the expense of competing firms. In fact I have heard partners of established firms specifically target another firm’s customers and operated as if all members of our Profession were competitors instead of colleagues. This is utter nonsense and such thinking destroys our Profession.

The first canon of our Profession as outlined in the AICPA’s Code of Professional Conduct (Principles) notes that we have an obligation, as members, to promote the well being of our Profession. This includes both improving the Art of Accountancy and, likely more importantly, to Cooperate with Each Other. We aren’t cooperating if we are poaching.

Learning and expanding by observation is simplistically easy yet requires infusing effort into the process. We grow our firms by investing in the opportunities we find and the ones we create. Waiting for the phone to ring is not a marketing and growth strategy. Firm leaders must learn to create their own futures.

Smart real estate developers have learned to look for leading indicators about where to build and what to build. For example, when it comes to mixed-use commercial style real estate what do you believe are the leading indicators as it relates to capturing early-stage value? It isn’t zoning or demographics. And, it isn’t merely location, location, and location. These indicators are either lagging (zoning changes occur after someone has figured there is a better use, acquires or options the property, and then seeks the changes they seek) or they are coincident, meaning they help us concurrent with the changes in the market. Neither of these is leading (predicting where the values are headed). It turns out that one of the best leading indicators is to watch where the artists go.

Artists are relatively poor (economically) and need to find inexpensive and creative spaces for their studios and residences. Artists seek out great value. Artists then tend to invite other artists to share their spaces. These new artist colonies begin a following. At some point these colonies of people draw the attention of supporting and cottage companies; (from creative coffee shops to stores to restaurants to dry cleaners) entire communities follow the artists to their new neighborhoods. And artists are creative and innovative as it comes to the quality of life of their buildings and neighborhoods driving up values by driving away dirt, dust, and decay. Artists, it turns out, are a great leading indicator for real estate developers who desire to be early adopters of profit opportunities by merely observing their own communities and where the artists are headed.

Firm leaders need to approach their growth the same way. Look for the leading indicators. Look for your firm’s equivalent of artists. Look for the innovators, the inventors, the new immigrant businesses, the prospects that are expanding, and look for value when others are blind to its beauty. Firm leaders need to get of out their offices and look around. They need to be active members in their communities and seek positions of influence in fledgling industries.

Firms mature, as do their clients.   Anyone can recognize a change is afoot after the proverbial tipping point where the innovators and early adopters have paved the way for the following majorities. The best firms and best firm leaders are at the left-hand edge of the diffusion curve. These mavericks inherently understand there will be many investments that fizzle and only a few that sizzle. It is those profits from the sizzling hot successes that drive the firm’s future value and growth.


Legislation and Regulatory Issues: Together with my VeraSage Institute colleagues, I have the opportunity to speak to and meet with thousands of fellow CPAs and CAs each and every year. One of our favorite questions to ask our audiences is: Have you recommended our profession to a loved one during the past year? Across the board and regardless of country (most common are USA, Canada, UK, Australia, and New Zealand) we receive positive responses from 10-15% of the participants. Inversely, this means that 85%+ of our fellow professionals have not and in reality do not recommend our profession to loved one (defined as a person one knows and cares about – unlike say a high school or college student sitting through some mind numbing “Feed the Pig” commercial).

This decline in advocacy about ones chosen profession is a leading indicator that something of a cancer must be present that is stripping away our enjoyment about what we do and how we do. Failure of firm (and profession) leadership to adequately diagnose and then cure this disease suggests the end is closer than we think to losing ourselves and becoming a trade or job rather than a career and profession. Personally, I do not want to see our profession go the way of the Scribe’s and be relegated to pages in a history book and postage stamp.

When asked why participants avoid recommending our profession, the most common responses include: regulatory overload, work load compression, and the sins associated with hourly billing as it relates to technological improvements and efficiencies via technology (think about the reduced time it takes to complete a tax return using software today then say 30 years ago when we filled in bubble sheets on CompuTax forms, or even 50 years ago when we prepared returns by hand and typed the values onto the forms).

Lets look at regulatory overload. This includes government regulatory matters from the SEC, the PCAOB, the IRS, the FASB, the AICPA SSARs, the GAO, the DOL, the 50+ State Boards of Accounting, the IFRS, and all other bodies deemed capable of dolling out but never retracting rules and regulations that impact what we do and how we do it. There is no joy in contorting ourselves to please the whims of bureaucrats residing in such cities like Nashville (home of NASBA), Washington, D.C., home of the federal morass of death by regulatory action, NYC and RDU (home of the AICPA). Such regulators act like they can use rules and procedures to triumph over common sense and good judgment. They can’t; but they sure try.

Leaders of our profession should seek ways to reduce the complexities of rules and regulations in exchange for more principled driven decision making that promotes the right answer, with the right disclosures, with the right outcome, so that users of our reports and services may make informed judgments about the economic activities of the businesses and individuals we represent.   Far too often, the so-called leadership of our profession is to cozy with regulators and rule making bodies and, in fact, support additional complexities under the misguided notion that more is better when in reality simpler is better.

As it relates to workload compression, this too is a function of an overzealous regulatory and ill informed bureaucracy and/or legislative body (or bodies). Much of this compression came about during the TRA 86 when fiscal years for pass through entitles was essentially abolished. This shifted more audit and assurance work along with the tax work to the front half of the year rather than allowing for a smooth seasonality of services. This has increased our need for people in narrow time frames and then we face an excess capacity of human capital in others. Firms burn out their people increasing the chance that our actually “best and brightest” leave our profession as it lacks the enjoyment they hoped to achieve in life. Firm leaders should continue to pressure their local, regional, and national officials to return to a time when natural business cycles could be used for associated filings and reporting periods.

Finally, the toxic nature of timesheets and billable hours drive talent from our profession. Time-based billing is the antithesis of professionally based pricing. Hourly pricing where one is compensated based upon recorded time does not align with the goals and objectives of our customers. Our customers desire a result. When we are compensated based upon our inputs and not our results, we are apt to add useless procedures, steps, and complexities that drive the billable hours up and hence charge the customer more. Also, timesheets are full of lies as people are unable to really capture in (6 minute) increments what they really do all day and so they tend to make a lot of it up. Ric Payne (the smart founder of Principa) has suggested that over time the lies balance each other out (e.g. I work a little for free for client A today and bill my time to client B, and sometime in the future it is reversed). This may be realistically true, but does not cure the challenge of misalignment of interests. Another toxic challenge of the timesheet mentality is that billable hours are rewarded for promotions, partnership, and influence.

Too many firm leaders list their billable hours like a badge of honor when in fact they should be ashamed. It is far better to produce results with effectiveness rather than efforts and price according to the value delivered rather then the time invested. I am reminded about the conundrum of hours invested versus the effectiveness of the team member via the following example shared by one of my former firm partners. His wife is a construction project manager. Her supervisor one time confronted her about the fact that the “men” on the job site were spending part of every Saturday working while she did not. The supervisor suggested this looked like she wasn’t pulling her “weight” as a team member and that come bonus time she might not receive an equitable share. Her response was superb. She responded with “if I were as wasteful and inefficient with my work during Monday through Friday, I would have to work Saturdays too.” – How right she was. And how wrong are firm leaders that value the inefficient worker over the effective one because the tool for measurement only records efforts and never results.

A final aspect to the tainting of the value of our professional lives is living within the childish nature of our elected officials. Their creation of complex rules and financing regulations designed to reward their patron saints (their donors) end up punishing their people by forcing unwarranted behaviors by citizens in order to minimize their individual tax footprint rather than supporting a culture where people seek to maximize their individual opportunities to expand their financial horizons. Too much of our national GDP is spent reporting and navigating the complex tax code. We need a simpler and fairer method to collect the necessary funds to operate our government.

Loyalty and Customer Economics: Firm leaders and members of our profession need to understand and operate within a customer loyalty framework. Too many firms reward the hunt, the capture, and the kill of a new customer while failing to understand why their best customers leave. It is far superior to enhance the value proposition of current customers then it is to invest heavily into new relationships.

Customers love to be loyal. Just ask any director of an airline loyalty program. Even if passengers dislike flying, they love ‘’their airline”. Ask a Nordstrom customer about loyalty and they will frequently advertise that they rarely shop elsewhere even if they believe Nordstrom is slightly higher priced (they generally are priced very competitively). Just look at American Express that captures great loyalty from all of their various card levels – from the inexpensive Green Card to the exclusive Black Card, American Express delivers value across the board or its continuing customers would use alternatives.

What is frequently missing in CPA firms is a reason for customers to remain loyal. This is partly because our profession focuses on efforts. CPAs extol how hard “we” work rather than focusing on helping the customer achieve her objectives, goals, and desires. When asked to rank those attributes that customers use to select CPA firms, firm leaders respond in the inverse to the customers. CPA firm leaders discuss their technical skills and acumen over their softer skills like communication, awareness, and creativeness. Customers on the other hand respond by relying greatly on communication, creativity, and engagement. Customers struggle to comprehend our technical skills yet too many CPA firm leaders only speak about their knowledge while ignoring their more important competencies.

CPA firm leaders need to understand why CPA firms are hired and why we are fired. We are rarely, if ever, hired or fired due to our technical quality.   We are almost never hired or fired because of our price (about 4% of all engagements are decided upon price). We are almost always hired and fired because of our communication skills, our ability be creative, our eagerness to help our customers, and our availability to help them when they want our help and not “after tax season”. Sometimes we are hired because we have nicer furniture or a better location. Sometimes it is because we will meet them at odd hours of the day. Sometimes it is because we offer a solution that others can’t. What I can guarantee you is that you aren’t hired and fired because of price or quality. It is all service related opportunities and challenges that drives customer decisions. Investing in customer loyalty metrics goes a long way to a more profitable firm. Simply remember that a current customer can be 11x more profitable then a new customer.

Experiment with Service Offerings: I believe that the best firms are the ones that experiment and expand their offerings. Many experiments will fail to deliver their desired results. That is a price of admission. There are two primary reasons for a firm to explore new opportunities and experiment with creative options: The first is that our complex customer base is not standing still and their wants and needs continue to evolve and if we aren’t at least with them or even better, ahead of them, they will naturally look elsewhere for solutions to their unfilled needs and desires. The second reason is that many members of our profession have signs of ADD. In essence, our best and brightest get bored and bored people become inattentive and inattentive people make mistakes.  Worse, bored team members daydream of better jobs and brighter futures and these daydreams become realities far too often.

I have concluded that our professional attention span is about 3 years. This is enough time to learn a skillset, master that skillset, and then teach that skillset to a new person and then be allowed to move on. I see too many firms with team members living the same routine for years and decades to the extent of missing the true needs and wants of their customers. Hence, they become my customers. Times are changing, generational shifts, web 2.0 to 3.0 – go head and add some R&D; experiment with new offerings, and take aware the boredom of our lives. Remember, each new mountain pass travelled generates a new world view and an ever-expanding world view is more necessary today then it ever has been.

Networking – Networking is not social media. Although social media is a part of networking it is not networking. Networking encompasses so much more than mere social media. Networking is the act of becoming an integral part of the multi-variant solutions to unknown problems. Thus positioning the professional in the middle of the necessary web of needed information and solutions to an infinite array of challenges.

We, as professionals, have the distinct opportunity to provide what I term as “bridges to structural holes”. The “structural holes” as I term them, are the distances between what a customer has and what the customer needs. Of course, one could substitute almost any synonym for customer. The key is that a well-networked professional is the key that opens many doors.

Most firm leaders undervalue networking; unless the participant is already a member of leadership. That is unfortunate. Networking should begin from the beginnings of student life, through early careers, into leadership, and into retirement. As Australians are fond of saying, “we all need Mates”. And Mates watch out for each other.

Networking is not about just providing referrals or leads. Networking is seeking solutions to problems that possibly don’t’ already exist and, concurrently, listening to wants and needs from those who will benefit from connections that we are only to provide.

Networking requires dedication and commitment. Networking is not about “you”, it is always about “them”. Networking requires in investment in time and resources. It requires your ears to be always open, your mind to be engaged, and your heart to centered on your clients, friends, and colleagues. Networking isn’t just slapping palms or sharing LinkedIn profiles. Networking is active engagement across all disciplines, across all strata, across all industries, and encompassing all opportunities.

Networking should begin even before the beginning of a career. Networking must begin most definitely concurrent with your professional work. Twenty years into a career, the connections made in one’s youth frequently pay dividends. The customers you meet, the contacts that are made, the alumni of your university, the town where you live, and the hobbies that you share are all part of a valuable interconnected web of opportunities and solutions.

The most important time for investing into your network is at the beginning of your career. Networking’s ROI is akin to the time value of money. The earlier your investment, the larger your return. Networks expand exponentially. They are not a zero-sum game. Young people must develop a network and they need time and opportunity to learn this craft.

Partners and other firm leaders must allow younger professionals time to attend meetings, events, lunches, professional society events, and community activities. Each and everyone one of these avenues provide an opportunity to meet someone whose individual return on investment is multiples greater than the average. And, when this occurs, the net present value of those future transactions is exponential.

Yet, such networking activities as described above run counter to the firm’s current objective of maximizing revenues. If, on the other hand, the firm had a long-term profit view, leadership would both understand the value of these early career investments and support return multiples of any “opportunity costs incurred today”.

A professional’s value is predicated on their ability to solve expressed and unexpressed customer wishes and problems. If you can’t do this, then the professional is really just a technician; nothing more than a hired gun to perform the work orchestrated by others. There is nothing extraordinary in merely following the recipe crafted by others. The value of a professional is primarily connected with one’s ability to craft excellent resolutions to an ever expanding list of unfulfilled opportunities.

My advice is to constantly expand your network, each and every day for your benefit and the benefit of others. In this way, you maximize your opportunities to really make a difference in the lives of others. There is nothing truer than a professional that makes a difference.

There you have it. Now you know what I believe should be in the wind of the accounting profession.

Now, enjoy your day.


Who is More Generous Bill Gates or Wal-Mart?

Blame Facebook. Actually it is really my fault as I was reading recent postings on Facebook and there it was: a shared post from a local television station positing that Bill and Melinda Gates (Bill, Melinda, or the Gates) are the most generous humans of all time (http://www.kgw.com/story/news/local/2015/06/05/bill-melinda-gates-biggest-philanthropists/28562631/).

When such statements are made, context matters. History matters. Definitions matter. And, even if it were true, why do I care? Really, why do I care about how Bill Gates spends his money? So I asked my friend who posted this item to Facebook “why do you believe that?” And she replied by asking me a question of “not true? Below is the full set of Facebook comments:


  • ‪Me to My Friend‪ why do you believe that?
Like Reply · June 5 at 7:50pm

  • My Friend to Me: Not true?
Like Reply · June 5 at 7:51pm

  • My Response to the Question:‪ Didn’t say that. Just is spending $ the criteria. Carnegie invested in infrastructures that lead to great things. Difficult to compare generations. The gates’ have certainly been generous but with very tax sheltered money. Warren Buffet talks about why rich pay less % of tax like him in dividends and capital gains while at the same time avoiding estate taxes of 40% by giving money to gates (likely because he believes gates will spend it wiser than the U.S. Congress and he is now fool. But possibly a slight hypocrite). How does one really define most generous? Thomas Jefferson created a university, as did the Stanford’s. Gates hasn’t done that? It is easy to look at their money and even their time but comparing across generations is dangerous. We can look back in 100 years and decide. History is too short for them at this point
Like Reply · June 5 at 7:57pm


‪My Friend’s Friend Responds back to Me: 

Why do you have to disect generosity?
Like Reply · 2 · June 5 at 8:47pm

  • My Reply to the Friend:    

Why? Well because I believe that we should consider such questions. How should one define such subjective terms? Does a rich person who leverages tax deferred assets that are contributed to something he controls more generous then the union labor family that quietly tithes and donates countless hours to community services but without fanfare and media? Are we, as a society, to over value money relative to spirit? What value has come from there efforts? Can you prove it or feel it? I am sure the world is better with their contributions then without. This is not a slam. But why the need for such a label? True generosity is frequently done in quiet and not in public. It is too easy for a perplexed media to pander such easy opinions that get repeated (posted at 9:14 PM June 5th)



The above conversation got me thinking not only about the state of our collective critical thinking skills, but also about the bias of media outlets and others to view donating a fortune as the most important generosity.

One of the lost skills of our current culture and society is the infrequent use of reflective critical analysis. I don’t mean political polarizations – the screaming from our political extremes – I mean an individual’s personal reflection and thoughts about the value of ideas and thoughts posited as facts. When such statements (like the Gates’ are the most generous in history”) are made in a factual framework, people frequently (and IMHO too quickly) jump onto the proverbial bandwagon and repeat the statement without confirming or understanding its validity or its limitations.

We all played the old telephone game when we were kids. The game was a lesson in our inherent weaknesses in communications, even within a small group and with nearly homogenous members. Statements by media outlets are merely a small segment (albeit overly influential) of our society’s infatuation with others and their lives and choices. It is too easy to simply accept what is spammed around the internet (or worse yet reported via a Google Search) and pass it on like it is a demonstrable fact (one reason the website Snopes is so popular with some people is to merely have some level of a Bullshit Meter available to inform the uniformed that the 65 year old Russian Woman really didn’t just deliver 17 children) but Snopes isn’t any good in cases where simple logic, inductive and deductive reasoning, and inquiry via questioning are superior to just accepting the statement as true, complete, and supportable by some level of independent verification . I’ll return to this topic in future postings, however for now, I believe my point has been made and you, the faithful reader shouldn’t be bludgeoned about this topic at this time.

Meanwhile, I decided to consider the value of the gifts of the Gate’s Foundation to that of Wal-Mart. Both enterprises benefit society: one (Gates) by endowing upon groups, institutions, and individual, grants, gifts, fellowships, and funding (frequently with controls, reports, strings, etc.). The other, (Wal-Mart) focuses on being the voice of the people. Wal-Mart is constantly reducing prices so that people (especially poor people) may receive the maximum value for their money.

Note: Unlike many people, I am a fan of Wal-Mart. Although I do not regularly shop there out of choice; I recognize the value Wal-Mart has created for our national and global economy. There are certainly many criticisms available to cast upon Wal-Mart and its practices. Many of these criticisms are (IMHO) overly jaundiced and lack the intellectual curiosity about the truth that I seek. For example, people will compare Wal-Mart to Costco as it relates to pay and benefits. Costco earns $2B per year from its membership fees. Wal-Mart is free. Costco reports a profit of about $2B per year. Hence 100% of CostCo’s net profits are from membership fees and not from profits generated by sales of their products. Wal-Mart does not have a membership cash flow. Wal-Mart is profitable for sure. However if Wal-Mart had increased its average wages back in about 2007 from say $9/hour to $12/hour – 100% of all of Wal-Mart’s profits would vanish and that would have created less stores, higher prices, and less choice (all of these are bad outcomes for poor people) – I will return to Wal-Mart and its complexities in future posts. The key part is that Wal-Mart kept inflation low in the USA for over a decade (the Government can’t do that); Wal-Mart lowers prices for the poor (what do anti Wal-Mart people have against helping the poor); Wal-Mart helps poor and rich in its communities by fostering lower overall prices at stores that aren’t even Wal-Mart (e.g. Safeway has to be competitive so it must balance its value proposition with options like Wal-Mart); Wal-Mart helps the environment by taking waste out of the distribution system (like excess boxes, wraps, etc.); Wal-Mart shares the savings of its innovations with all three of its constituencies (example – when Wal-Mart found a way to save 5 cents on packaging – the supplier was able to keep 40% of the savings, the customers received 40% of the savings, and Wal-Mart kept 20% of the savings {note this is not a sign of a greedy company – this is one that understands that value and profits must be shared}. These are just some of the benefits of Wal-Mart that aren’t widely discussed.

Lets now look at how the Gates Foundation and all of its PR stacks up against Wal-Mart (note – I will provide sources for statistics at the end of this posting for your individual reference):

According to the Gates Foundation website, lifetime gifts equal $33.6B (which is a boatload of money {and Gates has more for sure}). So, I will agree that Gates has provided a generous amount of money. Way more than I have; however I would like to believe I am at least as charitable but on a different scale.

Wal-Mart on the other hand as certainly provided community support, shareholder dividends, employment, and federal, state, and local taxes. I will ignore these societal contributions. I will focus on savings the customers have received by paying less at Wal-Mart then if Wal-Mart either didn’t exist or more likely wasn’t in their community.

For Wal-Mart statistics, I will reference only the past decade. Hence any value Wal-Mart provided during its first 35 years of existence only adds to my analysis. It should be noted that the values below are through my own analysis as Wal-Mart doesn’t provide statistics as to its “savings” provided. There are plenty of price comparisons though and you can use the link I provide below or perform your own research.

Some basic pricing savings for Wal-Mart as compared to its competitors averages 3.8% across the board. That means for every $1 spent a Wal-Mart, on average, a consumer would need to pay $1.038 in the general marketplace. More specific to say the North American market would be to compare Wal-Mart to Target. Target’s prices are (on average) 2% greater than Wal-Mart. This means a consumer is certainly better off shopping at Target as it relates to typical market-basket markets and stores and slightly worse off then shopping at Wal-Mart. In my analysis I will use a 1% across the board savings (which is likely at least ½ to 1/3rd of the actual savings – hence I wanted to be conservative with my values {e.g. less predictive savings value then to report more}.

Wal-Mart reported a total gross sales of 3.716 Trillion Dollars over the most recent 10 year period. Wal-Mart reports 144 million customers per week. For scale that means slightly more than 1/3rd of all Americans shop at Wal-Mart each and every week. The average sale is $61.17 (I did that by math). Using the 1% value noted above as net savings – that means each customer saves 61.17 cents per visit. This equates to a 10 year savings of $45.671B (the math is: 144M*52 (this gets us visits per year)*10 (now we get visits per decade)*.61 (the savings per visit) = 45.677B {rounded}) (see high school algebra does come in handy).

Comparing Wal-Mart benefits to the customer – freeing them up to spend their savings as they wish of 45.677B to Gates’ gifts 33.6B, we learn that Wal-Mart has provided 36% more benefit then Gates.

So who is more generous? Bill and Melinda Gates or Wal-Mart? Ultimately that depends upon how you want to value generosity.   I believe that Wal-Mart has provided tremendous real value and continues to provide that value each and every day and with each interaction with its customers, suppliers, communities, and shareholders. Gates provides value too – simply differently. Wal-Mart is likely more democratic about their contributions to society as they aren’t philosophically motivated to achieve any other objective then low prices and great value to its customers by constantly improving its supply chains, distribution, and watching any and all costs. Gates desires to have certain effects and outcomes. That is a value of spending one’s own money – you do get to choose where it goes (isn’t American great?).

Essentially, distinctions such as most generous, best run, nicest, most labor friendly, and any other type of ranking always needs to be analyzed to ascertain how the conclusion(s) were reached, why the conclusions really matter, and how do we confirm we have a reasonable understanding of the analysis necessary to draw our own conclusions as to the veracity of the statement. Otherwise we fall victim to our own ignorance as we propagate false and/or inaccurate statements as fact and hence contribute to the mental pollution that is all too popular in our current leap to quick judgments and fast answers.




Is Google Promoting Tribalism?

It is well known (or at least it should be) that Google’s algorithm for search provides results that are based, in part, on the information of prior searches. My understanding is this leads to similar people receiving similar search results and different people receiving different results as it relates to the same inquiry.

I first learned of this during the BP Deepwater Horizon Oil Spill. It was reported that a search of BP from a computer with prior searches of environmental matters would provide pages of listings associated with the Deepwater matter, oil spills, pollution, and activist information. Meanwhile, the same inquiry of BP from a computer that had a history of searching stock quotes, investments, and business, would receive pages about BP corporate matters and the Deepwater situation was relegated pages deep.

This concerns me on several levels. First, it leads to an unconscious concentration of similar opinions. Likeness, familiarity, and similarity are all vastly important as it relates to our social connectedness. And people are highly social. However, we have learned from past experiences that limiting our worldview by reinforcing our current positions leads to hardening of positions, inflexibility, and intolerance of opposing viewpoints.

Diversity in our natural environment promotes the general welfare of all inhabitants. Destroy the mountain lion’s habitat and the deer population swells. The weak, the old, and the sick thrive and survive longer than they would naturally in a balanced environment leading to increased disease that could lead herds of deer to be wiped out, not by predators, but by weakness. Additionally, the swelling numbers outstrip the natural vegetation’s ability to grow and food supplies are reduced leading to either changing migration patterns or starvation. With each cycle of reduced diversity the stresses upon the surviving support systems become greater until a time is reached that a calamity ensues and natural order is restored.

I believe that there is a similarity between the above deer habit example and people. People are naturally tribal in nature. We lived in tribes, clans, and villages for hundreds of generations and large cities and urban environments for less than 10 generations. Our DNA is hardwired for tribal mentality. (As a quick note – assuming a 20 average generation span {25 may be a better value – but I will work with 20 for this} that is 5 generations per century. Egypt, the oldest western civilization (at least on record) is about 10,000 years old. That means we are 500 generations removed from early Egyptians. From the early Greek’s, maybe 150 generations. From the fall of Rome, maybe 50 generations. From 1776, maybe 15 generations. My point is that our DNA is way more connected to our pre-industrial age than it is to our post-industrial age and our habits are vastly interconnected to these biological realities).

Google search results could lead to increased polarization as like people’s opinions are sourced from ever specific and concentrated sources. Aristotle once noted that opinions matter. However it was the opinions of the learned that matter more. Who are our learned people whose opinions we should value? Where are these voices?

Our mass media is following the path of Google. We have Fox on the Right with limited liberal perspective. We have MSNBC to the Left with an absence of conservative thinking. We have many with split personalities as it relates to our interwoven options and positions relative to fiscal and social policies.

Congress and the Executive Branch mirror and more likely extend these polarization and myopic positions as our winner takes all with a minimal majority and swelling support from fans while viciously verbally attacked from their detractors. Where is the civility? Where are the candid conversations about what is best? Where are the policy discussions that include and incorporate our distinct and varying positions? It should not be a winner takes all mentality.

I have met Presidents, Cabinet Members, and Congressional Leaders. I may not agree with all of their individual positions but there is common ground. A conversation about WE over ME is always appropriate. What is lacking today is the courage to reach across the proverbial isle to find our common interests. To find solid ground for one tribe to connect surrounding tribes. To recognize that we all have inherent biases and our maturity is based upon our ability to understand that and to leverage our sameness for the benefit of all.

Extreme positions are easily argued. They are based upon an ideology that in its abstract is generally appealing and logical. These ideologies, whether religious, political, or economic all lend themselves to binary answers. Yet the world is complex. Our environments are complex. Our opinions are complex. Yet our ideologies are too frequently binary.

Google is extremely useful and valuable. Google (along with Yahoo and other search engines) provides a wealth of information. Their algorithm capabilities are complex and highly useful. We, it users, merely need to remember that our search results are predicated on predictive behaviors, biases, and prior searches and we should be cognizant of the subtle implications of such results and seek ways to minimize our polarization tendencies.

Customer Service and Moments of Truth

Moments of Truth

            Each customer interaction is a “moment of truth”. And the savings bank of previous good works can be depleted with one poor interaction. One disappointment is all it takes. One gatekeeper that could have used judgment applied to a specific situation. One opportunity to understand that the happy customer tells few and the frustrated customer tells many.

If it isn’t clear by now, I was on the receiving end of a terrible customer experience. What is even worse, this is with my preferred brand.  A brand that I have had 2+ decades of great experiences and happiness with. And today – all of that is at risk. It is early enough in the year for me to make a shift and share my $50k to $100k annual spend on alternative options.

My frustration today is with American Airlines (www.aa.com)(twitter @AmericanAir). I was beginning my 2nd leg of 3 flights today spanning about 17 total hours and maybe 4,500 + miles. I have logged over 3.5 million miles with AA and its One World affiliates. I have been to each and every continent and I have been an Executive Platinum (One World Emerald) Member for about 10 years. I am a loyal customer with the singular ability to direct my spend. I choose where to spend my money and I may be choosing elsewhere.

If you have ever had the displeasure to fly through Miami International Airport (MIA) you already understand it is a challenge on good days and on bad days it is a nightmare. Customs lines are generally long. The crowds can be maddening. The inbound and outbound rush that is all too frequent in southern Florida all lead to a pressure cooker environment.

One reason for investing in the likes of Global Entry for speedier customs and immigration and AAdmirals Clubs for relaxation, work spaces, and snacks is to make the difference between a good day and frankly a frustrating travel day.

Today – the savings bank of American Airlines’ great work went flushing down the proverbial toilette. And it didn’t need to be that way. I will admit that I wasn’t in the best mood when I entered the club today. The immediately preceding phone calls had frustrated me. I was flying out the E terminal (which I detest) and on the US Airways part of the new American (which I am unfamiliar with).

AA in conjunction with its One World partners (BA and Iberia) now operate a Premium Lounge near the E Gates (this is an old Admiral’s Club location). – Note I arrived in D gates from Nassau, Bahamas and had to transit to the E terminal . There are two Admiral’s clubs in the D Terminals but those are, at best, a 10-15 minute walk to the E gates and I researched the usage of the E Terminal Priority Lounge prior to arriving in MIA. I did this because I needed some Internet time, a bathroom break, and a cup of tea. I was planning on spending my 20-30 minutes between flights being productive and relaxed.

Instead I received bitchy attitude from an AA Club Employee that only cranked me up and ultimately denied my wife’s entry that which should have been offered, even if the “rule book” didn’t think so. This is where that Moment of Truth arrives and in their moment – their truth frankly Sucked. It sucks so much I am concerned I won’t forgive and I guarantee I won’t forget.

As many of you already know, I (along with my colleagues) tour the world speaking and writing about customer experiences, great expectations, and the difference between a mediocre company and a brilliant one. The profit margins of airlines are so thin that disgruntled premier flyers are impactful. Frankly, at the amount I fly (2014 225+ total segments split mostly between Alaska and American and 2013 slighty more) they should treat anyone at my level special.   – As an additional aside, a colleague of mine who has flown more cumulative miles but not at my pace over the past few years was provided a Concierge Key – for gods sake I should have one those.

Today’s Moment of Truth has passed. A Scotch on the Rocks before takeoff has helped a little. Writing this has helped even more. Believing that you may read this and tweet about it so your friends will know to avoid AA Terminal E if possible, especially if they believe they should be invited into the Club, makes me feel even better.

It is funny, my wife who is traveling with me, and a genuinely nice person, even commented that the “lady at the desk had a bitchy attitude” – that is telling. If you want to share this – of course add #AmericanAir to your tweet. Maybe we can have them recognize this challenge.

For the record, here is the language from their website:

The AA, BA, IB Premium lounge is open daily from 1 p.m. to 9 p.m. and welcomes oneworld eligible International First Class, Business Class and Emerald and Sapphire customers. Customers traveling on an AA-operated transcontinental full fare First Class (F and Z inventory) or full fare Business Class (J and U inventory) ticket, as well as Admirals Club members departing from Concourse E, may also access the lounge


They would have allowed me in; but not my wife. What did they want me to do, leave her in the hallway? It isn’t like we were a dozen people. It wasn’t like we were going to drink them into bankruptcy. It wasn’t like they didn’t have the room. It was a bureaucratic response to what I truly believed was an earned and paid for accommodation. In fact she suggested at one point that she turned away another person and they quietly said ok. Well I am not that quiet especially when I believe I am within my standing. This is about the customer and not about the bureaucracy. I advised her that their website was vague and unclear. She argued with me. I launched my web browser – I read her the information – and she continued to deny my wife entrance and frankly that was a bad decision.

Her (the desk receptionist at the club) defenses were as follows:


  • We always have operated this way (who cares)
  • This isn’t the Admiral’s Club (like I am freaking stupid)
  • Yes your wife is on a F class ticket but is it a transcontinental flight (well if Miami to Portland via Charlotte isn’t at least a transcontinental flight at least I am crossing the continent and they don’t fly to Portland direct from MIA or I would have been on that flight.
  • Yes you are on an international itinerary but we don’t count Nassau as international (well whoop-de-do) your website conveniently omits that and by the way – the US State Department considers the Bahamas as international
  • Yes you are on an international itinerary, in first class, on full fare, but “this isn’t an arrivals lounge” – like no Shi* Sherlock. I never claimed it was an arrival’s lounge
  • Yes you are an Exec Plat member but these Premium Clubs only allow the “member” in. Really? Better check with the Marco Polo Clubs, the Qantas Club, the BA First Class Lounge – as I can guarantee that I (and a guest) are graciously admitted (not two guests by the way – so that is known).
  • I pointed out that their website was unclear. I pointed out that I was an Admiral’s Club Member. She acknowledged that. She said it doesn’t say “guest” and hence my wife of 20 years was not allowed in. This policy is stupid and their writing is unclear. And who’s responsible for that? Certainly not me as I didn’t write it.


She looked at me like I was an alien and she talked to me like I was a toddler – that only made my hair stand up and I can bark right back. Oh and remember, I am the customer. One should remember that. She could have said, let me call my supervisor or let me get you a cart to ride back to the general club. She offered nothing but attitude and my attitude can be loud too.


I tweeted about this via my twitter @morriscpa. AA has responded that they are “sorry” for my inconvenience – that and $4 will get me a Starbucks. AA wrote that they will have a customer service specialist reach out to me after my journey (yippee skippee but possibly helpful if future people can avoid this experience). At the moment AA is on probation. Because of this posting – it is not “double secret” probation. I will be the sole arbiter of the value of this relationship.   I will decide where to spend my money. I will decide whose loyalty program deserves my loyalty. I will decide if I forgive.


Unfortunately for them – it isn’t up them. It is always up to me.


Lessons learned and relearned. Your customers decide if the value exchange between their money and your service is worthwhile. Your team members, especially those on the front lines, represent the entire company in each and every interaction. That happy customers remember tell a few and frustrated customers tell the world.


The ball is in AA’s Court – how they respond will determine how I ultimately feel about this and how I evaluate how I move forward with my airline choices

CalCPA 2015 Honoree Dinner Keynote Address

Note:  –  This past Thursday, I had the pleasure of sharing a brief commentary during the annual CalCPA Silicon Valley/San Jose Chapter’s Honoree and Scholarship Dinner.  In attendance were the Past-Presidents of the Chapter (my year was 2002-2003), Several area university scholarship winners (each was very impressive, probably why the Big 4 have already hired them), along with their professors and family.  Also in attendance were CalCPA Members that have reached their 40 year mark and hence no longer pay dues (lucky them).  Finally, our Chapter awards a Lifetime Achievement Award to one member that has gone above and beyond.  Below is my keynote address (delivered after dinner – so maybe it should have been renamed, an After Dinner Speech;  next time).  I simply thought I would share it here.  I hope you enjoy reading it as much as I did writing and delivering it. –    Dan

Honorary Dinner

Is it an Is or is it Ising?


Good evening past presidents, distinguished 40 year members, professors, scholarship award recipients, the friends, colleagues, and families of our Lifetime Achievement Award recipient, Stu Karlinksy, fellow members of CalCPA, and guests –

It is an honor and privilege to share some thoughts and comments about our profession, its past, its present, and its future.

            My favorite professor and mentor, Dr. Dominic LaRusso, once expressed his view of time: He said, “that for some…..Time Is   and for others – Time Is Ising”…..Is time a noun as is “time is” and hence inactive and merely present or is Time a Verb as in an action for which we, its benefactors, are able to harvest vast wealth? Including financial wealth, psychological wealth, social wealth, and family wealth?

            I believe that Time is a Verb and our ability to harvest is grand. And speaking of time, there are seconds, minutes, days, months, years, decades, scores, and centuries. Each, with its own cadence and its own rhythms. As children, time is fleeting, fast, and sometimes slow. As early adults we recognize that time, at least prospectively, speeds up – and as we crest into our AARP years – we wonder where it has all gone.

            Tonight’s message is for you: young and old, senior and junior, experienced and inexperienced; student and teacher. These are a maturing man’s view of things I wished I had bettered understood when I was younger and for which I believe are worthy of discussion.

  • I wish I had understood how much timesheets suck the life out of professionals and are at odds with the customer.
  • I wish I had understood that we serve Customers and not Clients. That while clients are recipients of what the service provider desires to provide with little control on either inputs or outputs, Customers receive “custom”ized services designed around them with outcomes they desire. Frankly, customers pay more than clients.
  • That when promoting and selling our services that we should focus on outcomes and not inputs. Time-based pricing focuses on the firm and the professional whereas focusing on outputs aligns the customer’s interest with what they want and what they need.
    • Landscaper – (share the lesson here)
  • I have learned that we do not compete with each other. Although we share the same profession, we are colleagues and not competitors. We do however, compete with any and all organizations that can raise the bar of customer expectations – from FedEx providing real time access to each and every package; to Nordstrom playing a piano while shoppers shop, to Google developing a driverless car, to the Ritz Carlton who’s entire mission is to exceed even their customer’s unexpressed wishes – Like taxi cabs of today, we compete in a marketplace driven by outsiders who desire to provide a superior solution to our customer’s challenge and while we labor to protect our monopoly, change is among us and if we forget this, we will be relegated to the role of the Scribe and soon to be forgotten.
  • I have learned that specialists are really valuable and firms that specialize produce superior profits; it is the Deep Generalist that has more fun enjoying each and every day, rain or shine. That ultimately it is our human spirit that drives our success.
  • I have learned that is always better to fire a customer than suffer a painful day providing services to the wretched, to the greedy, to the arrogant, and to the cheap. One doesn’t improve their life until they surround themselves with better people.
  • I have learned that there are 4 ways to spend money – and to never ignore the different quadrants
  • I have learned to price the customer and not product or service – just like an airline – different prices for different people provides optimal results
  • I have come to the conclusion that our future professionals need deeper studies in liberal arts and sciences, and less accounting, auditing, and tax work. The prior comprehensive learning platform provides the foundation for our technical prowess. We should control the profession’s education, like Law and Medicine do, through our own professional schools rather than being a part of a general business curriculum.
  • I have learned that CalCPA, its committees, its governance, its chapters, and its education foundation, together provide an opportunity to change the world of our members by creating an environment for connections and relationships beyond measure. That through this great organization, I have had the pleasure of impacting ten’s of thousands of fellow CPA and CA’s lives and livelihood. That much of that work would never had been achieved or if achieved would have been arrested in its development simply because I had the good fortune of saying yes when asked, being alert when listening, being brave when scared, and being resilient when resisted. I am who I am because, in large part, this organization, this group of independent voices, the amalgam of friends and colleagues, provides an environment like no other for each and everyone of you to grab those proverbial reigns and direct the horse you ride to seek the future you want.
  • I have learned a great deal – and my learning doesn’t stop. To our graduates and students, lifetime learning isn’t a mantra of the old, it is the formula for designing and living your future. Be the drive. Drive your time and make it a verb. Life requires action and you are the only one that can create the future you desire. To our professors and teachers – thank you for crafting our young. Thank you for investing in our future. Thank you for sharing of yourselves to those you touch to have the power to drive their future. To my friends and colleagues, thank you for being there even when you were trying to avoid me. Thank you for your support of my dreams. Thank you for giving of yourself so our profession has a superior foundation to for which to move forward, and thank you most of all of your attention.

May each and every one of you have a remarkable year and until we see each other again, remember to smile, take some time to smell those roses, and may the University of Oregon someday win the Big Game.






Lets Just Call This a Rant about our Narcissistic Behaviors

Is it just me or is our country actually becoming more handicapped? Or has our egotistical/narcissistic personality merely found new ways to feel special?

Case in Point:

I observe the use, and unfortunately abuse, of the handicapped placard as one example. Here people use their relatives’ placards when they aren’t present because, heck those spaces are being wasted by non-use anyway. Or they sometimes exaggerate and request placards when truly a little more walking would do them some good. (Note I could qualify for a placard because of my current heart condition but I am in the camp of “a little more walking does more help then harm” so I have elected to not request or apply.)

Besides prime parking spots, many cities allow handicapped parkers to avoid paying parking meters and tolls. And who wouldn’t like that?  It is understandable, and frankly no program is foolproof and subject to some reasonable policing, we will have to live with a certain level of fraud and use more ridicule to help the Abusers kick their habit.

What has certainly been on the up rise, much like the spread of a virus, is the Service Animal. I am not speaking of seeing eye dogs or hearing dogs or the ambulatory type service dogs that are certainly helpful; and, we as a society should support such use. I am talking about the 30 year old that just “can’t be without his or her pet” and insists it flies for free (or goes to the grocery store, or sits inside the restaurant).

We know many of the service dogs are just that. Solely for people who are so self centered that they just feel it is their right to have their family pooch with them 24/7 (probably why I like Cat people).  I place our dog in a doggy hotel when we all leave town. I would never support its claim as a service dog even though I can guarantee that my wife would certainly feel better with her family pet licking her face.  But feeling better isn’t a handicap. If it were, then I am handicapped too; as I would feel better with lower taxes.

I have seen hunting grade retrievers, with rope for a leash, connected to someone who has been bird hunting in Canada claim the dog is a service dog and is allowed to fly for free.  And the agents and security people are unable to question the right of these passengers.  Hogwash. There is no right to fly the pooch for free. Yes, I know about the ADA. The intent of the ADA was to help free barriers to the disabled – not the lazy, simple, or egomaniacs I too frequently encounter. Well intentioned legislation that is extended through regulatory or legal expansion beyond any rational measure.

Accommodating real needs should be expressly desired. Trumped up ones should be told to take a hike (without the aid of their pet).

Also, I have been on delayed flights where a passenger who is allergic to dogs was unfortunately in both a middle seat and next to one of 3 dogs on that flight. She had to move. Did anyone volunteer to help?  No. So we waited for the stewardess to negotiate a change.  At some point to get the flight going I would have exchanged my 1st class seat for a middle coach to get the plane down the runway.

The challenging thing is I know there are real non-visual handicaps like Epilepsy where a trained dog can help. I am sure there are others. But the numbers in reality are way fewer then the percentages I witness of flying public. That is where I just know the system is too easy to abuse.

Who is at fault?  Well we all are. We start by giving all the kids trophies for showing up. We teach them they are so special.  We treat them as all smarter than average and then we reward every student a Student of the Month award for merely showing up.  We reward them for seeking special treatment. We demand their teachers and schools accommodate every nuance.  We demand higher grades for Johnny and Bessie as God forbid any one is Average.

We look at others and feel short changed. We want that better mortgage rate, nicer car, and then we see the Service Dog. Or our friends have one and we don’t, so we become envious. So we plead with our doctor for a note and voila, we have the required note. And pooch doesn’t have to suffer the kennel and we all pay the price of these insecurities.

Let’s face it. We all want to feel special. And sometimes we are. Oftentimes we aren’t. And having others subsidize one’s behavior and choices is unfair to those that pay and foot the financial and psychological price. The real cost is the implications to those that really and truly need to privilege because We, the Public, simply see the picture in front of us and deem the person guilty.

Think about it.

Tale of Two Companies: Customer Service in the Age of Now

Today I experienced both the highs and the lows of customer service. VeraSage is well known for our work in TQS (Total Qualify Service) and service failures and service delights are always learning experiences and ultimately the difference between the two ends of the spectrum is rarely (and I mean rarely) the fault of the direct customer contact and almost always (like 99%+) is the fault of the leadership of the company, department, or organization.

First the low as I prefer to end on a positive note, much like a composer enjoys using a crescendo – always better to start soft and end louder then the other way around.

So, I am at the Sacramento Airport location of Peet’s Coffee. Now, I rarely visit Peet’s not because I am a Starbucks fan (which I am) but because their coffee is bitter for my palate so today I ordered a Peppermint Tea (I do enjoy Peet’s Teas – so this was perfectly fine with me). When it was clearly my turn for my hot drink at the
Barista bar, the Barista said “Peppermint Mocha” and then she looked at me. I said, “did you say Peppermint Mocha?” and She acknowledged that. I responded with “I order a Peppermint Tea”. And the world stopped.

The registers stopped. The conversation stopped. She starred at me like I was an idiot and how could I have not realized that I must really want a Mocha and it was already made. So then the fun began. The Barista looked at the order taker and said….”do you want to make the call or should I?” I am thinking call? What call? Make a Tea, give away the Mocha, estimate the refund, and give me back the $2 (like I was sensitive to an airport pricing of a Tea relative to a Mocha). And the order taker disappeared and came back exasperated. Next the Barista took over and she even runs down the hall to find……”the Manager”. You know, the person who has the only key to open the register without a sale. This takes like 10 minutes. My hourly rate is in the pennies……LOL.

Finally the manager arrives, a 45 year old frustrated looking guy because he had to walk down 100 yards, show me his key, all for $2. What a waste. Strong leadership would have provided alternatives like “hey sir, sorry for the hassle, do you fly through SMF often (often enough would have been my answer)” or say – “sorry for the hassle her is a bottle of water or some snack – are we fair?” And I would have said “yep”. Fair is fair.

People makes errors. Orders are misplaced and mishandled. I wasn’t upset and had they been real smart – the Barista would have just fixed it and I would have been on my way – the $2 wasn’t my big deal – call it a tip. But the process of leadership at the SMF Peet’s did allow me to shake my head, reaffirm I like Starbucks better (actually I really like Stumptown Coffee in Portland – come visit me and I will take you there), and remember that leadership is what really matters.

Meanwhile – earlier at the airport I had an opposite experience. When I returned my rental car to National (I am premier member of their Emerald Isle – great program by the way) I mentioned to the team member checking in my car that there were some items they should note. I mentioned that when we rented the car we noticed a rear seatbelt had been cut – that wasn’t a concern as we weren’t going to use the back seat so no reason to move suitcases and my contract had note to it. During my trip I noticed a tack in a tire – but it wasn’t causing a leak nor dangerous driving so I left it alone and I mentioned it to the manager. I also noted that twice the check engine light came on when the car was cold (it was 26 degrees this morning) and it cleared when the engine warmed. None of these issues really impacted my driving experience however I wanted National to know about them and to have the opportunity to correct these matters before they could lead to a future issue.

Turns out I was being checked in by the Manager on Duty. He listened to my comments and made notes on the windshield.  He expressed appreciation of my comments.  Although they can print out a receipt on the spot, I always let them know the automated email for me is great. And he stops me for a moment and tells me that his is lowering my rental by $30 for the “inconvenience”.  He didn’t have to ask anyone.  I didn’t ask for a reduction as the price I had already received was more then fair price for my rental.  The point is he wanted me to receive something for a less than perfect experience.

I appreciated it.  I will, of course, tell all of you how much I like National Rental Car (www.nationacar.com)  and how much Peet’s disappoints (at least at SMF).

The difference is leadership.  Trust and lead to happiness.  Control and you lead to a culture only comfortable to Putin.  The question for you, is what is your leadership style and does it align with your desired customer experience.


Think about it and Happy New Year.

Dan Morris Discusses Corporate Inversions and Lowering Taxes on Financial Fridays

I had the honor of participating with Financial Fridays, the Financial Literacy integrated program lead by Leonard Wright,  Jason Thomas, and Scott Taylor and broadcast from KLAV 1230 AM Radio in Las Vegas.  See http://www.klav1230am.com/financial-fridays.html for more information.  Financial Fridays provides an excellent venue for CPAs and other financial professionals to have discussions about money, saving taxes, economics, and related topics.

During my session, we discussed corporate inversions, the value of lower corporate income taxes, and why a rising middle class for India and China may be good for American manufacturing and labor.

Below is a clip of my interview.



What PKFs Can Learn from Country Music

Modern country music blends the best of traditional American values of hopes and dreams with classical rock rhythms and melodies.  It is difficult for even the most ardent anti-cowboy listener to avoid toe-tap while listening to some of the classics and modern hits alike.  Country stars crossover to rock and pop a even some country singers are involving aspects of rap (with a better vocabulary and message, of course).

Yet, even if you aren’t a fan of modern country music, there are lessons to be learned.   Studying (and implementing) their success benefits all aspects of our firms and professions.

First, the historical legends are never far from center stage.  Those trailblazers that helped established a fledgling musical style are honored and revered.  The history is rebuilt into the future.  The young stars and hopefuls know their history, know how their music was developed, and proudly expand their offerings to a new generation without abandoning what came before.  Innovation and collaboration are two hallmarks that separate country music and most professionals.

Country, more so than rock and pop,  certainly appears to collaborate frequently.  They produce duos and join forces for songs and tributes that expand their individual capacities.  I rarely witness true collaboration in CPA, Law, or other Knowledge firms.  PKF’s are fearful of collaboration believing there is no benefit and only risks of losing an edge over the (perceived) competition.  In fact, this stubbornness by leaders of these professions creates excessive waste in human capital, fixed capital, and redundancy.  What we all need to do is constuct more duos and collaborative services where we align to serve new  and mature markets, alike.

Country music stars of today coach the stars of tomorrow, as they were coached by former stars. Even though they have separate bands, labels, and musical styles, the leaders of today invest in relationships by assisting the newcomers.  And when the newbie wins a prestigious award that the stars of today were nominated for, these leaders hoot and holler, clap and cheer, and genuinely support the winner without whining about their current popularity or success.

PKFs rarely, if ever, help develop the talent of their future competition.  PKFs see the world as a zero sum game instead of one of abundance.  They don’t value sharing their love of their work and guard their ideas like they wholly own them.  PFKs struggle to even share within their organizations and frequently treat each of their own in ways akin to how a Piranha treats a fledgling fish.

Envision how PKFs could change the world by working together rather than apart?  How firms could coordinate talent across party lines to serve the public good?  How firms could end duplication and specialize where they are strong and collaborate where they are weak?  How leaders could spot the young talent and help nurture even if it is a long-term strategy?

You can’t fake true admiration and awe.  I was privileged to attend Entertainer of the Year, George Straits’ final large venue concert.  He is clearly loved and beloved by fans and fellow performers alike.  He shared his stage with nine (9) other superstars of today and yesterday.  Each of whom he had collaborated with, toured with, coached, and supported.  The tears of joy shared by, between, and among these stars was genuine and moving. Even when one of the stars slipped on a lyric, there was laughter and happiness.  The value of being a family; and not just a competitor.

Leaders of PKFs should learn from the success of country music.  Learn to share with others the love of your profession.  Find talent wherever it is and coach, teach, and admire their future growth.  Find other firms and professionals to collaborate with and share your joint talents for the benefit of all.

Silo thinking is rotgut of the professions.  It is time to expand our horizons and partner up for a stronger and more collaborative future.

Partnerships: Lessons from the Army

A little over a year ago, I read a fantastic book by Thomas Ricks title The Generals:  American Military Command from World War II to Today.  It is a fantastic book on leadership, vision, character, failings, and resurrection.  For over a decade, I have been part of a chorus of colleagues wailing against the Partnership Model for CPA and other professional knowledge firms (PKFs).


As an outside observer of local, regional, national, and global firms, I have first hand witnessed the daily dysfunction that the Partnership Model creates and the carnage it leaves behind.   Partnerships as they are formed are more about protecting their firm’s bounty rather than increasing it.  Partnerships are more frequently about inequality among a band of supposed equals as it about collectively working together for the benefit of the firm.  Partners within partnerships are more frequently rewarded for individual actions rather than firm driven results.  Partners in partnerships more frequently sacrifice others before they sacrifice themselves.  Partnerships destroy more value frequently than they create even when their measured numbers increase, the toxins of the partnership permeate thorough the firm and its human capital.

Compare Partnerships with the Army.  Both have an overall mission/vision.  Both have groups of individuals, each with a personal vested interest in the success of the organization.  Both have to learn how to nurture a process for finding, recruiting, and retaining talent.  Both have specialists.  Both have career paths.  Both have roles that focus inwardly on producing results while others have roles of interfacing outside the organization.  The list of similarities could continue.  Ultimately a Partnership shares a lot with the Army.  Except in one major distinction.  Leadership.

The Army treats ultimate leadership differently.  Yes, the Army promotes within their groups and specialties. The Army rewards for time served and skills learned, just like Partnerships.  Except for the last major promotion, the processes are similar.  It is the last step that separates the Army from the Partnership and it is this last step that truly matters.  The Army transforms a soldier during the promotion to General.  Generals leave the insignia of their specialty behind.  They become Generalists.  Generals aren’t merely superior rank, they are to be the superior leaders of the entire organization and not just their current assignment to a Company, Brigade, Division, or Outpost.  As Ricks writes (p. 35 of 1407 on my iPad (how does one site a page when we can change the font?):

As brigadier generals, the newly promoted officers are instructed in a special course – they no longer represent a part of the Army, but now are the stewards of the entire service.  As members of the Army’s select few, they are expected to control and coordinate different branches, such as artillery, cavalry, and engineers – that is, to become generalists.

Compare the above to Partnerships.  Partnerships promote within their current groups.  They do not promote leaders for the benefit of the firm. They promote within their departments, or offices, and silos.  This is a mistake.  It leads to the continuation of the status quo. It leads the the hoarding that stops cross selling.  It leads to the world of Me instead of We.  It leads to choosing to benefit internally rather than externally.  We promote and reward the specialists at the time and leadership position that requires a generalists.

Substitute Rick’s terms of artillery, cavalry, and engineers for tax, audit, and consulting.  Partners in firms should be leaders of and for the benefit of the firm and not just their department.  They should be able to lead across the platforms and not merely within their chosen field.  Managing Partners should have demonstrated true multidisciplinary leadership by having lead in all departments and divisions with only one goal:  enhancing and protecting the firm.  This is why MPs should never have customer responsibilities.  the firm is the customer.  Partners should have leadership responsibilities first, including vision, nurturing, coaching.  Let the senior managers (think Colonels , Lt. Colonels, and Majors) provide the services, direct customer leadership, and technical review.  That is their speciality.  Partners should be their visionary leader with their hearts and minds on the organization and its components and not about the working papers that are collecting dust on their floor or credenza.

The Partnership Model is broken.  It regularly destroys value and interferes with the firm’s future.  When reality finally sits in and the firm  tires of listening to the mundane voices of the common consultancies, look to the Army for wisdom.  Promote leaders with vision and make the generalists and have them direct across the organization.  In this way, the firm flourishes, egos diminish, and the customer is truly served.