Another Australian Trailblazer: matthew tol + associates

I received an E-mail from Matthew Tol from Australia on November 20, 2006. It touched off an exchange of E-mails and articles he has written on the importance of customer selection. Matthew has a unique perspective on grading customers. On January 1st, 2007, Matthew E-mailed and said his firm is ditching timesheets June 30, 2007. Congratulations Matthew!

November 20, 2006

Ron,

I have just come across your website following some information provided to me by David Connell of Anzan in Australia (I'm pretty sure you know him).

To say that it's inspiring is to downplay my reaction—and I haven't delved very deeply at all!

I now know that I am not alone! I now know that there are some creative, progressive, challenging thinkers out there and I look forward to joining in on the various discussion boards (should I be so bold) on topics that are fairly dear to my heart.

It may well be somewhat presumptuous, but I have attached an article I have written for your perusal—I would welcome your comments/feedback.

The profession is (as usual) at the cusp of great opportunity but unfortunately, practitioners (generally) are not of the brain type necessary to recognise and take advantage of the opportunities which lie out there—bit sad for "business experts" isn't it? I remember talking at one of David's network meetings last year where a firm was saying they couldn't see any further opportunities within their client base (they were too busy doing low level crap work)—I asked them about their 2 top clients—in a perfect world, what would they do for them?—they rattled off about 20 things. I then asked why they weren't doing them; their answer? They were too busy! Refer to the attached article for further discussion on this point.

Anyway, I thought I would drop a line to firstly thank you and also give you a look over what I have written. I look very much forward to perusing your website in greater detail.

Many thanks for your prescience and care for the profession. I think I have (finally) found a home!

Kind regards,

Matthew

Matthew Tol

Principal

matthew tol + associates

Chartered Accountants + Business Advisers

Ph: 03 5333 3799

www.mt.com.au

Here's the article Matthew attached:

Get Serious or Get Out!

In my travels around Australia, I often get to speak with Accounting Business Owners. I deliberately don't call their businesses "Practices" as we, as a profession, should have stopped practising years ago.

The underlying theme of most of the discussions I have is that "It's all getting too hard, staff are a big problem, clients are a bigger problem, I'm working harder than I ever have and making far less money". Any wonder we can't attract any new players to the "Business business"!

Let's just share one of the stories that I have been alerted to in recent weeks:

Tragedy One

A sole practitioner who has been working hard ("'til 11 o'clock every night") doing salary and wage returns who has been so busy he has neglected one of his business client's needs such that he created a $300k CGT bill for them which should not have arisen. He indicated that "it's all got to much for me and I left the office last Friday with the view that I'd never come back in here". He did actually return (because he'd appointments that week and didn't want to let his clients down). How long until this poor man explodes?

Couple this with the attraction of corporate accounting (large salaries, stock options, travel, promotion etc) and the leakage from the private practice sector of the industry is very understandable.

As is discussed in the "Commerce is the Preferred Option" article in the Spring 2006 issue of Tax Practice "As organisations confront the shortage of suitably skilled accountants, they are also facing the increased understanding by candidates of their own market worth; candidates know they are in demand and accordingly seek an employment package that reflects this. Apart from salary, flexible hours and other work/life balance initiatives are attractive while retention of existing staff has become a business priority". Flowing from this—if our staff/candidates see us as business proprietors having a less than fulfilling professional life, why on earth would they be attracted to the profession in the first place or remaining in it for the long term?

It is up to us to change the perception. To change the perception, we need to firstly change the reality.

The current reality is that many of our colleagues in public practice are just so busy fighting fires, they don't get a chance to stop and have a look at what they're actually doing and why they're doing it.

Clients are generally getting more demanding and more fee sensitive, the government seems to think that changing the laws every year or so is a great idea and it's getting harder to recruit and retain staff.

Consequently, more principals/partners are doing more work—some are charging in excess of 2,100 hours per year—over 48 weeks (assuming they do have some time off) this is equivalent to nearly 44 hours per week. That's before they do any administration in their own business, mentor and train their staff and set direction and strategy for their business. The problem here is that these latter issues are just not being addressed. The report published by businessfitness "The Good, The Bad and The Ugly of the Accounting Profession 2003" highlights that the highest chargeable time per principal in their survey was 2,100 hours per year. David Connell from Anzan Professionals, a consulting and advisory business to accounting businesses around Australia and New Zealand, believes there are proprietors of accounting businesses working well in excess of this.

So, we are in the rather unpleasant position of having more work to do than we really need for clients who may not appreciate what we do and who are generally paying us poorly and where we can't actually spend any time working on our businesses. Who wants to work like this? Any wonder we can't attract people!

Further issues arise when we consider the average age of principals/partners currently in public practice. Anzan's David Connell believes the average age in Australia is over 50. This means that in the coming 5 to 10 years, there is highly likely to be a mass exodus of senior personnel from the industry which is going to place further pressure on those who remain. Either that or someone else is going to come along and take over the areas of expertise that we have effectively "made our own". This presents a massive threat to the profession, but it is also an incredible opportunity.

My concern with the ageing of the profession's leaders is that many of them are getting stale and "over it". This is exacerbating the issues of not creating opportunities which are available for them and their businesses.

The March 2006 Harvard Business Review included an article titled "Managing Middlescence" in which the Authors argue that workers in the 35-54 age bracket were being neglected by their employers. This age group is a major component of the current owners of accounting businesses around Australia (especially those aged over 50) and the comments in the article are highly relevant to our profession.

The authors listed seven different "Sources of Frustration" (which I have adapted to the accounting business owner):

• career bottleneck—"where do you go from here?,
• work/life tension—too many commitments between work, family and other demands,
• lengthening horizon—not providing well enough (or at all) for eventual retirement,
• skills obsolescence—just too much information to keep up to date,
• disillusionment—to do with income, competition, demands placed on them,
• burnout—after 20 years on the treadmill, work can be "unexciting and repetitive"; and
• career disappointment—you just don't seem to have reached those dizzy heights you'd imagined for yourself.

It is no secret that we have endured an incredible amount of change in our profession over recent years. The pace of change is unlikely to decrease. In addition there is the perception among younger people that the profession is somewhat "uncool/not sexy/boring" and, as a result, there is not much in the way of replacement personnel coming through. This means that there is unlikely to be the eager young Manager in your business who will pay you good money to buy you out! End result—succession gone and retirement nest-egg disappearing fast!

There are a couple of practitioners I know who have changed the way they approach their business. They have adopted a far more "disciplined" approach and have worked out that the Pareto Principle actually works. They have also worked out that all clients aren't a match for their business and they have also worked out that you can lose money of big fee clients!

Pareto Principle

The Pareto Principle states that you will obtain 80% of your results from 20% of your effort. If you have a look at your client base, you will generally find that 80% of your income comes from 20% of your clients. What would happen if you got rid of the other 80% of your clients? Less hassle, lower stress, lower resource demands and increased profit on lower turnover!

It is a difficult proposition to review your client base (in an honest way) and analyse exactly what those clients mean to you. If they are a pain to deal with, constantly complain about fees and give your staff hell, why are they clients? Being an accountant does not obligate us to put up with rubbish from those people who chose us as their advisers. As Maister says—we can be prostitutes in that we'll do anything for a client with a chequebook!

Imagine, just imagine, if you had a client base full of great clients? It can happen. By way of example, we "sacked" two clients who totalled nearly $40,000 in fees for bad behaviour. Guess what—we replaced them with better clients who are actually paying more!

I can remember speaking to some accountants from Queensland and we were discussing putting up with "rubbish" clients. The conclusion of the discussion was that, just as every client has the right to sack their adviser, every adviser has the same right to sack their client. I can already hear the roars of disapproval! But think about it.

If you were to get rid of your "rubbish", how much better would your staff feel, how much more fun would you have, how much more time would you have to devote to your "great" clients and do all that stuff you've been wanting to do for years but haven't been able to because you're always putting out fires for the rubbish clients?

Think about the demands of the top ten of your clients—they will more than likely be wanting your assistance with a number of issues on which you can provide some really great advice—it will be terrific work, well paid and intellectually stimulating. You can't do it though as you're too busy dealing with the low level issues of the other 370 clients in your list! Oh, and by the way, if you were to be proactive and do the high value work, it will mean that those top 10 clients are far less likely to up and leave your business. The clients know what they want and they'll only put up with so many years of excuses before they move on.

It would seem to me that the majority of the issues we find as a profession relate to taking on too much—we are, by our very nature, people who like to help our clients solve problems. We will do a heap of work (often uncharged and unacknowledged) to save a client a heap of money and then have them complain about the bill!

As Greg Hollands from Hollands & Partners in Canberra has put it regarding the current status of client relationships and billing:

• Beg for work
• Execute the work with insufficient resources
• Work long hours
• Calculate the time cost (at what cost?)
• Ignore the result
• Send the client a reduced fee
• Starve while waiting for payment, and then
• Do it all again next year!

Any wonder you're not really enjoying what you're doing!

This is where we, as a profession, need to make some significant changes.

There are four changes required:

1. Get realistic about who we will act for—we do not have to take on every client that walks through the door! We need to analyse what sort of clients we want and get about getting them. Once you have clarity about the "perfect client", you can let your staff and clients know. Clients love nothing more than being told "we really like you and we'd like more clients exactly like you". I was taught in physics that "like attracts like"—get scientific. Our process revolves around having "ideal" and "survival" clients. The ideal clients get really well looked after and developed. The survival clients are there until we can replace them with ideal clients. No more A,B,C OR D. They're either in or out.
2. Decide what sort of business you are in—if you really love doing salary and wage returns and only want to work for 6 months of the year, that's fine, and become the best at it. If you want to concentrate on business work, do that and get rid of your salary and wage clients. Have your goal match your desired client base and you'll end up being far more focussed on what you're doing and how you're doing it and you will create your own reality.
3. Provide a positive influence on and example to your people—let them see that being the owner of an accounting business is actually a great life! They'll want what you've got.
4. Have the guts to make the changes necessary—there will be a lot of people who read this and then go "I should do that, it would be terrific". Five minutes later, the phone will ring, it will be that pain in the $%*& who's always late paying his bills wanting you to "drop everything" to help him out on an issue. You'll do it (because you don't want to let him down even though he constantly lets you down) and then fall back in the rut. All that you have done is let yourself down—again.

The profession is changing and it is incumbent on us as the current custodians of the professional image we enjoy (trusted advisers) to ensure that the profession is allowed to flourish and grow. The current environment has its own peculiar challenges and we, as business professionals, should be more than smart enough to take advantage of the opportunities that are out there.

Albert Einstein once said that insanity was doing the same thing and expecting to get a different result. It seems to me that the profession might just be going a little insane!

As hinted at above, the changes required to get to this point can be fairly profound.

BUT, if you make the changes (or at least start along the path), you will find that your business actually improves, you have the capacity to do work which stimulates you, you're dealing with clients you thoroughly enjoy dealing with and you're making good money. On top of this, you will be able to attract and retain great staff who will see that you're in a business which doesn't kill you. Middlescence gone, succession secured, retirement funded and enjoying your whole life a lot more.

No Competition

We recently recruited another professional staff member. She was referred to us by a legal firm who knew her then-employer (relocating towns to move with her partner) and recommended us as great people to work with. She contacted us via email, looked at our website and we agreed to meet. At the interview, one of our staff detailed the great environment we had, how we finish work at 5.00pm and the supportive and encouraging culture we have. The candidate then went to another firm in town where they proceeded to tell her how busy they are, how much extra time she would be working and how stressful it all is. Guess who ended up being the lucky employer (and she is fantastic)?

It's your choice. Are you practising, or are you serious?

Copyright: Matthew Tol, September 2006

Hi Matthew,

Thank you for your kind words, and I'm glad you think of VeraSage as your home. We have assembled a group of incredibly intelligent, innovative and committed professionals dedicated to bettering our professions for posterity.

A good place to dive in would be the three-part series of books I wrote for the ACCA (Burying the Billable Hour; Trashing the Timesheet; and You Are Your Customer List), which you can download here in pdf:

https://verasage.com/verasage-authors//

Also, the Trailblazers section has case studies from firms that have made the transition to Value Pricing and no timesheets. The Main Threads are the burning issues we think are facing the profession. The Community Blog is where our Fellows collectively rant and rave about all these issues. Our Declaration of Independence is our Purpose, and we take it very seriously.

I read your article with great interest, and really enjoyed your thought process. In the last book mentioned above, you'll read about the Adaptive Capacity Model, which basically puts into a visual metaphor what you say in your article. One difference: we do believe in different classes of customers on the plane, so there still is an A, B, C distinction, but it's in how a firm allocates that capacity, and offers a different value proposition to each class, much like the airlines.

You are so right in saying most firms take on too many low level customers. We equate this to Qantas putting the second story of the 747 in the back, rather than the front, of the plane. One universal truth we believe at VeraSage: all firms have too many clients, and too many partners. Further, firms are too scared to fire customers (they fire us!), and they also don't know where new ones come from since they don't have a clear and distinct Purpose, or effective marketing.

I also loved your final challenge to the current custodians of the profession. If you think about it, they are to blame for the current mess we are in. How can they expect to continue to hire intelligent knowledge workers and treat them as if they are Galley Slaves on the SS Billable Hour?

I am certainly familiar with Rob Nixon and David Connell, as I have debated both openly and critically. I don't have much respect for either, as I think they are keeping the profession mired in the mentality that it sells time through their incessant advice on the importance of maintaining timesheets, and benchmarking studies denominated in revenue per hour (why not square footage?). I believe timesheets are the cancer of the professions, and in my books I have refuted EVERY argument for their existence. If that sounds harsh, I make no apologies. We are a think tank, and our Purpose is to seek the truth, speak it as loudly and widely as we can, and damn the consequences. You can read a recent post I wrote about Mr. Nixon at:

https://verasage.com/consulants_are_part_of_the_problem_not_the_solution/

I do hope you become a Member of VeraSage. We have plans to launch a true member supported think tank in the near future, but we will always share our intellectual capital freely with our colleagues.

Thanks again for your kind words, Matthew, and please keep in touch. We need more pioneers such as yourself if we are to have any hope of saving our profession.

Sincerely,

Ron

Morning Ron and thank you for your reply of last week.

I have read through the documents you referred me to and must say that I wholeheartedly agree with most of it.

I do however still question the logic of breaking clients up in to A, B, C & D categories. Sort of like being a bit pregnant!

My view is that a client is either a right fit for my business or they are not. If they are, they will join with us in developing a total relationship package that satisfies their and our needs and enables the relationship to develop in to the true "trusted adviser" role.

I suppose it has to do with ensuring that the client acquisition process is one where you sound them out properly and explain in some detail how we see things operating—they are either then on board or they are not. I have come to this conclusion having come out of a partnership where we "took on all comers" and had a shit time. I went through the list I took when we split and spoke with each of them—those that were "with the program" stayed and have developed beautifully, those that haven't were told "sayonara". It's the basis of all our relationships&mdashwhere the client did come on board and started to misbehave, we counselled them. If they still didn't improve, they were sacked. Very therapeutic for me and the staff here.

Gets back to the issue though of what you want your business to look like. As I put in my article which I sent to you—the clients are either survival or ideal. I have found over the years that a lot of accountants have trouble delineating exactly where the demarcation between A, B, C & D lies. As you have written, no customer is the same—they are all unique. They are uniquely ideal or not. From the discussions I have had with colleagues around Australia and New Zealand, a lot of clients fall partly within and partly without the prescribed definitions a lot of businesses use as the basis for the client categorisation. This causes confusion and, to be honest, the result is that the accountant generally "bumps them up a level" as they (again) are wanting to do the right thing by the client (delusional I know).

I look forward to your thoughts on the above.

Kind regards,

Matthew

Hi Matthew,

Thank you for your thoughtful response. I love your thinking on this. Believe it or not, we are not in disagreement.

Our Adaptive Capacity Model begins with the premise that a firm's customers should be graded A/B/C/D/F. However, it is the firm's strategy that ultimately determines who should be on the plane in the first place, which I believe is exactly what you are saying. We are enormous proponents of shedding the back-end of the plane, but as you no doubt know, this is a gradual process for most firms.

Having them see how much capacity they are allocating to low-value customers is usually a catalyst for change. Also, showing them the necessity of reserving capacity for front-of-the-plane customers becomes self-evident. We also advocate having a minimum price just to be able to get on the plane, which weeds out the low-value customers. So your statement about the importance of the acquisition process is right on. It also forces us to learn (and manage) the customer's expectations, which is critical to a successful relationship.

But the Adaptive Capacity Model also recognizes no two customers are alike. They each want a different level of service, so think of the different sections of the airplane as a different value proposition, all at a different price. This is not to say you couldn't have a firm with just first-class and business-class customers, and some firms do just that. But realistically, we have to start with where firms are, and even in firms with only front-of-the-plane customers, there are still differences in service levels, access, hand-holding, involvement, etc. The model tries to recognize these differences, both from a capacity allocation and pricing perspective.

None of this is to say that a customer should stay on the plane, no matter where they sit, if they are toxic or we can't add any value to the relationship. But the better we are at qualifying customers the less likely we are to allow the wrong customer on the plane in the first place.

Maybe an example would help. Suppose your firm has a minimum price for all individual tax customers of $2,000, which includes tax return, tax planning and unlimited access. If that's all the customer wants from you, then we'd say that's a back-of-the-plane customer. If you offer a $7,500 minimum price for business customers, then they'd be in full fare coach. But for those customers whom you have a "trusted advisor" relationship with, and who purchase more from you than just compliance work, then these would be business and first-class customers. Normally, a firm can't have more than 50% of it's customers in these categories.

Many people think we mean just because someone sits in the back of the plane we are advocating treating them like dirt. But that's not the point. Like an airline, we are saying sitting in the back is a value proposition—if you want a cheaper fare, you'll have to give up some value (less rapid access, we file your return when we have capacity, not when you want, limited [or no] partner access). Allowing the customer to select where they want to sit in the plane resonates with them, as they can determine the proper value/price point they desire. It also recognizes that customers have up and downs, and will, most likely, move about within your plane over a lifetime.

I hope that clarifies it a bit. But rest assured, I think your points are exactly right. It's all about what type of firm you want, what is your Purpose, and who do you want to serve.

Thanks Matthew, I look forward to hearing more from you.

Ron

Ron,

David Connell has asked me to do an article for his next newsletter. I have attached it for your amusement!

Cheers,

Matthew

Here's the article for David Connell's newsletter:

To paraphrase Mark Twain "If you find yourself in the majority, it may be an ideal time to stop and look at what you're doing".

Over recent weeks, David & I have been corresponding quite regularly on the issue of timesheets and job costing in accounting businesses. I have also been corresponding with Ron Baker—a fellow who seems to generate a fair bit of controversy with his views! Timesheets and job costing are "hot topics" and seem to generate a considerable amount of heat and passion in everyone.

David has asked me to put together an article outlining my views on the topic. I hasten to point out that I am no expert in this area, I am only learning and I am sure that there will be a fair number of you who read the following and determine that I'm barking mad. So be it.

So, on to the thought process:

Historically,

• Timesheets were invented early last century for manufacturing industries
• They were adopted by accounting and legal firms in an effort to keep track of costs of doing jobs for customers
• Prior to this, our profession worked on "fixed pricing"
• Various "KPI's" were then based around the information gathered from timesheets and assessment of a business and it's personnel was done on the results of these KPI's.

Problems

• Keeping track of time recognises nothing in the way of value created for the time spent
• How do you justify a write-up to the client if they ring and complain about the bill? Negotiating a fee after the job is done is the worst negotiation tool in the box—going from the front gives you far greater leverage.
• Utilising a manufacturing measurement tool for a knowledge based industry such as ours seems ludicrous. We are not producing widgets and if you think we are, then I would suggest you reassess your views on what we actually should be doing for our clients.

Focussing staff performance reviews and the like on their timesheet is ridiculous as the outcomes from this are (and this is not an extensive list):

• Time focus keeps them driven by the clock, not by the outcome
• Ranting about write offs will act as a disincentive to them (they won't record the time properly and they won't invest extra time following a hunch)
• By having everything based on time spent, we actually encourage staff to be less efficient as it means higher fees for slower work (or greater write-offs with resulting rant)—not great is it?
• Hours recorded is OK, but what rate are you attaching to it? Each accounting business has it's own basis of doing this so it is a highly subjective process anyway. High write offs may mean your cost drivers are all wrong— not that your staff are being lazy! I have yet to meet a firm which is truly happy with their costing system—each one is different which means that they're probably all deficient in some way! As I said to David, do we use a multiple of salary (and if so, which one), or absorption costing (including what), or ABC (including what)? Too rubbery and open to "interpretation". If a firm has 20% write-offs would you think it's in trouble? Of course you would. If I then told you it had 45% net profit (bps) has it still got a problem? What if a firm had 10% write-ons? Yet only made 15% net (bps). David can show you many examples of these types of results. Too much time is spent analysing stuff which is apples and oranges. Benchmarking decreases in utility.
• Clients have become conditioned to want to know how much time is spent—how much time SHOULD be spent? Do you ask your surgeon how long the operation will take (in six minute increments)—of course not because it doesn't bloody well matter—you're interested in the outcome!
• David has pointed out that we do this because that's the way we were taught. My response to that is that about 400 years' ago, we were taught that the Sun revolved around the Earth which was apparently flat! It's not about what we've been taught, it's about what we've learned!

Considerations

• Clients want a relationship based on trust and openness. If they are concerned that they can't ring because "it's going to cost", you have the problem, not the client!
• Staff want to be able to "explore" opportunities for clients but they are loathe to do it as they will be ranted at about the time which is written off on the timesheet—unless it works of course! You don't see Intel, Hewlett Packard or 3M adopting this process.
• Having fixed fees will focus you on the internal efficiencies in your business—YOU get the benefit of the efficiency, not the client as their fee is fixed. This can be done by looking at processes, systems and business stuff—isn't this what we're supposed to be good at?
• The time spent on analysing timesheets, justifying write offs and "counselling" staff is better spent on working out better outcomes for clients or on building your business. Both of these approaches end up improving profitability.
• Why measure your business on lag indicators? The focus should be on leading indicators. Using the stick to motivate doesn't really work in most situations—why would we use it in a professional knowledge based industry? Surely our people are better than that (if they're not, why are we employing them)?
• Managing staff is an issue in itself and needs to be considered in light of the culture you create within your business—if you want them to justify their existence every six minutes of the day, are you saying you trust them? You should be able to assess how your staff are performing without needing a timesheet—the quality of their work, quality of their client relationships and quality of their contribution to the office are more important that having 87% productivity methinks! Sad truth is that many of us are not great people managers. We confirm that by relying on timesheets to assess our staff. The other problem with this is that we are teaching the future custodians of the profession to manage in the same inefficient, outmoded way we were taught.
• Clients love it when you think for them and ring them out of the blue with a new idea. How are you going to be able to do this if you are worried about the possible write off?
• Just what code and at what rate are you going to charge for the time you spend building and consolidating the relationship you have with a client? Isn't this of greater value than doing an FBT return for them?
• All the time spent on justifying the time based costing approach to managing our businesses is actually (I believe) better spent on building the business worth. You can't shrink your way to success!

Summary

Getting the model changed is essential if we are to move to consolidating our position as "trusted advisers". Where the client has certainty up front with their fees, they are less likely to leave, you have the incentive to do the job more efficiently and the client will ring you more often to "have a chat"—what happens every time this comes up—you get more work! Why do we stop the phone calls by billing clients for them—sort of like McDonalds charging you to enter their store so you can then buy a burger! Inane! Your clients will also really respect what you bring to them and their business. Result? They will refer you to other people. Just. Like. Them. Your staff are freed from the drudgery of recording every six minutes of their day. They can develop and grow in your business (isn't this what it's all about?) and this will, in turn, add value to your business.

Call me a heretic. I reckon it's pretty simple. I just think we need to approach it as we would if we were the client. I have been in the majority. I have stopped and thought—a lot.

Copyright: Matthew Tol, 2006

Hi Matthew,

Nice article. I'm sure you know by now you are swimming upstream!

The Pioneers take the arrows.

Ron

Ron,

Bloody oath I do—I am expecting the official title of "Pariah" shortly.

The problem with leading from the front is that your back is exposed to those who follow!

Had a long talk with David Connell this morning. I told him that my view of the problem with our industry is that not many of our colleagues realise we are actually in business. Using accounting principles to run a business ain't real smart as they are subjective, historical and not predictive. You need business skills to run a business, not accounting skills.

I look forward to being thoroughly ostracised.

Oh, had a think about the "we need timesheets so we can bill for the special work we do" crap. If you have a half decent workflow management system, there is no need for timesheets as the workflow management process (a business system) is the basis for billing, not the timesheet (a processing system). Expect a fair bit of heat on that one too.

Thanks for you reply.

Cheers,

Matthew

Hi Matthew,

Oh, you're so right about all this.

Think about it: the billable hour let's us off the hook on understanding our value; learning and managing our client's expectations; effective project management; post-mortem analysis so we learn and reflect on what we do, rather than re-creating the wheel: and lack of leadership and knowing what are team members are really doing (we always learn after the timesheets come in).

It's truly insane. Toyota doesn't even have a cost accounting system, and they seem to be effective at manufacturing and pricing!

You have more patience than I do dealing with Connell, he truly doesn't get it, and probably never will. It's just not part of his worldview, despite all the evidence around him of firms that are doing it effectively.

Just because everybody does it, doesn't make it right. Truth isn't determined by democracy. This is why I have such a problem with the consultants—they don't seek the truth, they just look around, see what other "successful" firms are doing and then advocate everyone copy them. They would consult the buggy whip manufacturers right into obscurity.

VeraSage is the only entity I know standing athwart history yelling stop. And we will continue to do so until we can reach a critical mass of firms who do the right thing for posterity.

Keep up the great work and keep in touch.

Ron

January 1, 2007

Ron,

Firstly, Happy New Year, I trust you and yours had a safe and peaceful festive season.

By the way, you'll be very pleased to know that I have spoken to all my staff and I am intending on dropping timesheets from my business from 30 June 2007. I will be engaging a General Manager from outside the profession to drive and implement the process and would really appreciate details of accounting and legal firms we could liaise with in devising our new system—more so that we don't repeat the mistakes of others! The details and contact people in those businesses would be most helpful.

Let's have a great 2007!

Kind regards,

Matthew

Matthew,

Happy New Year to you as well.

Congratulations on deciding to become a Trailblazer! Australians and Kiwis are really showing the rest of the world the way to becoming Firms of the Future.

The person you want to contact is Peter Byers, Senior Fellow, VeraSage New Zealand. He has helped many firms make the transition to Value Pricing and no timesheets throughout New Zealand and Australia. He is the definitive authority "Down Under." You can E-mail him at: Peter@byers.co.nz.

Keep us posted on your progress. We will have a fantastic 2007 if we can find more farsighted professionals like you!

Ron