[Paul Shrimpling]:  Hello, my name is Paul Shrimpling from Remarkable Practice. Welcome to this series of podcast interviews, albeit the video versions, with the owners, leaders, managers of accounting firms who've done a brilliant job of challenging the status quo in their firm, challenging their thinking and the way they work. As well as connecting at a deeper level with both their team and their customers and their fellow owners as well, so that they ultimately transform the results of their firms. You could consider how well you in your firm humanise the numbers. You could, arguably should, compare and contrast your approach with someone leading 3000 people across multiple countries. Well, on this discussion with Elona Mortimer-Zhika, CEO of Iris, you'll hear how Elona unpacks how important the people are to her business, both their team and their clients. Let's go to that discussion with Elona now.

[Elona Mortimer-Zhika]:  Hi, I'm Elona Mortimer-Zhika. I'm the CEO of Iris Software Group. I've been at Iris now for about seven years, but I started as the CFO, did that for two years, then did COO for a year and been the CEO for four years now. I say I started as a CFO because really I'm an accountant at heart and I've always been an accountant. I was born to deal with numbers. Maths has always been my favourite subject, so I always knew I was going to be an accountant. My dad was an accountant, so I was always going to follow in his footsteps. I've got two boys, Zach and Xander. They're amazing. They are my hobby because I don't get a lot of time to do a lot of things, so every time I have spare, I spend with them, sometimes on the football pitch, but mainly doing some Lego. They love Lego. And I'm married to Craig as well, who is super supportive and really amazing to let me focus on the career that I have. And that's me. The other thing about me is that I'm from Albania and I came to the UK when I was 16 years old and I learned English from foreigners. So that's why my accent is quite funny, in case you are detecting lots of different accents.

[PS]:  Brilliant. Brilliant. Well, I'm from Burnley, which is why my accent's a bit weird. But there we go. But what a beautiful country, Albania. Kate and I are just back from a European road trip and we spent some time in Albania, in the Northern Albania mountains, just off the charts. Beautiful. Beautiful.

[EM-Z]:  It is beautiful. And it's still raw, which is really nice. And you can have 40 degrees of sun and you can still have snow in the mountains. It's beautiful. Yeah. Love it.

[PS]:  Yeah, it is amazing. And you say raw. It is raw. Kate and I did a really quite serious mountain walk and then when it got a little bit sketchy, realised there's no mountain rescue team up there.

[EM-Z]:  Zero. You're on your own, mate.

[PS]:  Brilliant. Brilliant. So, really good to have you on the podcast. Really pleased that you're taking time out of clearly your very, very busy schedule. Can I just check? How old are the boys?

[EM-Z]:  They are eight and twelve. So they are full of energy and they love roller coasters and adrenaline. So all of our family holidays have something to do with roller coasters. We've just come back from Disney and Universal.

[PS]:  Brilliant. Nothing better at that age group. But I've got three boys and a girl. The three boys were all Lego mad, so that's why I resonate with that.

[EM-Z]:  There's a lot of Lego in your house.

[PS]:  So, Elona, let's dive into the starting point where we always kick off. Because you're a trained accountant, you work with accountancy firms, because of your experience across Iris, you've got a team of people. What size is your team at Iris now?

[EM-Z]:  We've got about 3000 people at Iris across the UK, US, Canada. We've got the team in Australia, Ireland, India and Romania, but the majority are sitting in the UK and the US.

[PS]:  In the UK. All right, so I want to go down two avenues. One is the profession and the other is your experience of leading the business you're in. What does humanise the numbers mean to you? So you can start with the firm, Iris, or you can start with the profession you choose. But what does humanise the numbers mean to you?

[EM-Z]:  I mean, at its basic core, to me it talks to telling a story. So you have to be able to make the numbers relatable. Because I appreciate I love numbers and I'm a bit of a geek, but that's not everybody's background. And I feel that my job as an accountancy professional, or even as a business leader and a CEO of a business, is to make those numbers relatable, to make them tell a story, to be able to connect the dots and provide insight that's maybe not obvious to other people. And to me, that's about looking into the how did we get here, the why are these numbers saying what they're saying and what do we do next about them? And I do genuinely believe accountants are fantastic at doing that, because any business owner in reality could potentially do their own books, scan the receipt, etc., do their own books, and it says, I made a profit. And that's great, that's black and white, but it's a lot harder than that. It's about looking into how did that come? Was that a recurring profit? Is that going to happen again? Or was that a one off? Was it created in a way that's going to be sustainable? Or did you have to make some cuts? So maybe you had a very profitable month because you didn't hire enough people this month. You were late in hiring somebody. And that might look great, but actually it's not great for the business because that means you're going to be late because that person was going to add any value, and now you might be late on a project that you needed to make. So, for me, it's about going beyond the black and white of what the numbers are, because they are black and white and colouring in. It's a little bit like when somebody gives you one of those drawings that they give to kids to colour things in and the drawing is there, but actually how you colour it in... And if you give it to ten different kids, they will colour it differently. It's the story that it tells. And for me, I think that's super important. It's about adding quality to the quantity, because, as I said, numbers can be factually right or wrong, but what they say and what's the quality of what they're representing is super important. And you need a human for that. There is no software in the world that is going to tell you that. And I speak from a place where... I run a tech business that sells software, so I'm very, very passionate about software. But software is there to take the mundane away. Software is there to remove the tasks that can be repeatable, because software can do them much faster, so that it gives more time back to humans for them to use the powerful brain, the insight, the advice, to be the best business partners they can be. And for that, software can't do that for you. You need the human interaction. And that's what I think humanising the numbers means.

[PS]:  Brilliant. You've opened a brilliant door for me. So can you tell me a story, please, that demonstrates how the numbers are a tool, the software is a tool for the numbers, that enables that connection, the relatable piece. I guess there's an emotional payoff, then, isn't there. To use your phrase, you've gone from black and white to colour. So I'm curious now, have you got a story, an example that you can share, that demonstrates clearly that insight?

[EM-Z]:  Well, I think it's really, for me, it's what accountants do on a day to day basis. You don't go to your accountant because you just want them to do your tax return for you. Being completely honest, like you could potentially do that yourself. I do my own tax return, I happen to be an accountant, but that's by the by, You could do it yourself. You go to your accountant for the bits that you can't do yourself, for the advice that they can bring to the table. And I genuinely believe that that is their power. Their power is that they have seen 100 other customers in that month, potentially, and they have seen common trends between each customer. So when you rock up to a meeting and you say, I've done really well this month, it's been great, they can look at that revenue of yours and they can go, yeah, but did you do really well? Because we just put some prices up, which is great, but then how sustainable is that? Is that going to happen again or did we do really well because the quality of the business is good? If I look into the backlog, how is your book of business looking? Is there one year's worth of business already there? How is your pipeline looking? So I think it's landing the facts in the hands of somebody that can analyse them in the why, the what and the how to be able to come back to you and say, no, this is great and there is a great quality business here. The reverse also happens for startups, I think, because it can be very, very difficult when you're starting your own business and all you see is money going out and you've got a lot of ambition but there isn't necessarily a lot coming in. And again, having the right person as your business advisor who's seen this before and going, this is going to be a really tough six to twelve months. You are going to have to watch every penny. However, how we measure success cannot be based on numbers because if you looked at the numbers this is atrocious, this is like a massive loss. That doesn't mean you don't have a viable business in front of you. Success has got to be measured by... that investment has been made into a product that's being launched. How are those milestones taking place? Are they on time? Have you had a demo? How many customers have you spoken to? So it's about, as I said, adding colour to something that factually anybody could look at and go, this is right, this is wrong. I believe in that quite passionately because I think that our job as business leaders is to build sustainable businesses that are going to be here for a long time. And that means quality businesses that, yes, are focused on the P&L, but actually are focused on how those numbers are derived. So, having happy employees that are engaged, having happy customers that are looked after, acting, delivering value through great products, etc. Sometimes those things can actually put your P&L backwards, but they put the quality of your business forwards and the value of your business still increases, even if your P&L might look like you've spent more money today because actually you might have spent more money, but you've spend it to build something that's sustainable. Maybe it's a cloud product that you're bringing to the market, maybe it's a new idea, maybe it's your customer support team or your customer success team because they're going to make sure that those customers stay and then you'll see the benefits in employee attrition that gets lowered, in your customer attrition that gets lowered. So to me that's the beauty of taking some numbers and then analysing where they come from to say, yeah, this is the right decision because you've increased quality here as opposed to just quantity.

[PS]:  Yeah. So what I'm hearing, and put me right if I've misinterpreted here, the black and white numbers are in the P&L and balance sheet, but the colourful numbers are the numbers that are the drivers that put money into the P&L and balance sheet and improve the PE ratio and so on.

[EM-Z]:  Exactly. The numbers that you see in the balance sheet, in the P&L, they're at a point in time and in order for you to really realise how well you're doing, you've got to go back and you've got to go forward and you've got to have some great KPIs that drive your business value. We use OKRs at Iris, other people use different things, but fundamentally know the path of where you're going, be really true to your true north, know where you're going and understand that you're on that journey. And maybe you can't make that journey overnight, you've got to make some stops somewhere, but at each stop, you've got to check yourself and go, am I where I thought I was going to be? I've now done.... I wanted to be somewhere five years from now and I'm now one year through that journey, do I feel that I'm 20% there in terms of effort? Have I achieved what I wanted to achieve in that time or not? Because if you're not, then you are falling behind. Whilst if you look at the numbers, they're not really going to tell you that if you look at them in an absolute way. That's why, for me, as I said, I am an accountant, so I'm biased, but I do genuinely believe everybody needs an accountant in their life. Everybody needs a business advisor that can help them be better, that can interpret those black and white things for them and add the colour.

[PS]:  Yeah. And I think what you're really saying is everyone deserves a colourful accountant, not a black and white one.

[EM-Z]:  Exactly. I love that, Paul. Everyone deserves a colour. And the reality of the situation is, people that are going to accountants, they're amazing architects, business owners, entrepreneurs, they're not accountants themselves. So really, they shouldn't need to know how to do this. It's not their job to do it. If they focused on doing this, they wouldn't be focusing on the business that they love, on the reason why they wake up in the morning in the first place. So having a great accountant next to you that adds colour to your business is a great combination to make sure that that business not just survives, but thrives, regardless of what the macroeconomic conditions are.

[PS]:  Brilliant. Brilliant. So I know we've got 40, 45 minutes, but you've just opened several doors for me, for us to have a conversation that could put us here all day, but, let's try and keep it compact. So, four things I want to touch on now is you mentioned team engagement, you mentioned OKRs, client loyalty and true north. So I'm just going to, if I can, is use that as the agenda for where we go. So KPIs, colourful ones, aren't in the P&L and balance sheet. Team engagement ultimately drives client care, quality of the work that gets done, the speed with which the work gets done, because an engaged team will do that. A disengaged team won't look after your clients, won't do high quality work, won't do it fast, won't care as much. How do you track and measure team engagement? How do you turn that into a KPI?

[EM-Z]:   It's a really good point and I do think that culture overall is super important and it evolves on a daily basis. So it's not something that can be tracked at a point in time and you forget. And it is led from the top. So if you're a business leader and you want to focus on people, who are your biggest asset, let's face it, if you look at anybody's P&L, the biggest cost today is their people. They are the best weapon, the best tool, we have to thrive and succeed, and sometimes we take that for granted, and so it comes across the board for me. So at a high level, how we measure it is we have a software here, I'm not doing advertising, but we have a software we use called Peakon, which is a third party, not owned by Iris. Everybody knows Peakon and we launched that in the middle of COVID actually, when people were looking to save money. We decided that it was going to be really, really important to understand how our people were feeling. Now, typically, what used to happen with staff surveys, we used to do these Gallup surveys and they would happen once a year or twice a year. And the reality of the situation is, by the time that the results had come in and they'd been interpreted for every department and all of that, it was already out of date, it was already two months on. And knowing how your people are feeling once a year or twice a year, I'm sorry, but it's not good enough. It's just not good enough. Because we humans change on a daily basis and management has to react to the pulse of how the employees are feeling. And you can have Peakon surveys as often as you want. So at Iris we have them every single month. It's ten questions. You can choose the questions. So the software will recommend, there's a certain set of questions that they have, but you can also customise and add a different question every month, which is what we do if we want to listen to our people about a specific topic. It might be cost of living crisis, it might be what are you happy about, what are you excited about? How are you feeling on work/ life balance? Whatever it is that you want to know. It's literally ten questions. It takes them, on the whole, if you write comments, it might take a bit longer, but if you don't write comments, you can get it done in about a minute. So it's really not time consuming for your team because you've got to find something that's not going to take them away from the day job. If they're really busy, the last thing they want to do is write you a survey for an hour as well and then have to work overtime because they had to do that. And then the software is great because we've set it up to integrate with our HR system. So the comments are anonymous, so it's real. So that's great. But it means that you can escalate it at the hierarchy level so that I as a CEO see the pulse for everybody at Iris. But if you're the manager of one department, you would see it only for your department. You can see it straight away and it gives you ability to interact with that employee so you can say you acknowledge their issue. You might not know who they are because obviously they've gone anonymous. So if there is a specific issue that they've raised, you can go back and say, can we pick this up at our next one to one? Because I don't know who you are, so please bring it to me. What I've really noticed is that people need to be heard and need to be listened to. So most of the time people just want to say something because they've had a bad day. And just that little interaction back that says, this is really important, this means a lot to me, please raise it next time. Sometimes even that is enough. And they don't even raise it later on because they just feel at that point in time that somebody heard them, they got it, it was a bad day. And so for me, employee engagement has to be measured consistently rather than, as I said, once or twice a year. And then we have other forums. So obviously there's appraisal systems, there's quarterly objectives that we set our team. You can see it through. So the Peakon score is issued every month at Iris and then people in senior leadership levels, a part of their bonus is aligned to a certain Peakon score being hit. The reason for that is people leave their managers, on the whole, when they want to change jobs. So if your team is unhappy...

[PS]:  They don't leave a business, do they, they leave the people.

[EM-Z]:  They leave the people. And if your team is unhappy, you as a manager have a duty and a responsibility to make a difference. So it is your job to be able to motivate the team and therefore part of your bonus at Iris is aligned to your team having a certain score.

[PS]:  Brilliant. Brilliant. So you've got this monthly pulse, ten questions. It's giving you a really strong insight as to the level of engagement for you across the whole business. And each line manager gets an appreciation of their team and so on. How do you know that action is being taken around that, Elona? Because it's one thing to measure stuff. I always think, what's the point of the KPI if it doesn't actually drive action?

[EM-Z]:  No, I agree.

[PS]:  How do you know it's actually having an impact?

[EM-Z]:  Because... so, your score goes up and down, so they're scoring you as well as giving you feedback. For me, at my level, I'm able to see everybody's comments as well as what their manager did with their comments. So obviously then my senior leadership team can do the same for their team. So a big chunk of what we spend weekly at Iris, in our senior management conversations, is to go and discuss, first of all, the theme of the comments that are coming in. But also you can nudge, as a leader, you can nudge the manager of the person that left the comment to say, what have you done about this comment? Because I haven't seen you acknowledge it, I haven't seen you comment back on it. So I don't know what's going on. Our HR business partners, we have HR business partners that are aligned to every function at Iris, so this is a big topic for them. So we have departments that we know we might have a specific issue at a point in time. Maybe they've lost a couple of people, maybe people are working really hard, so we will deep dive, but the scores can't lie, right? So every month we have the top managers and the bottom managers communicated at Exco and then we work with those managers to improve their scores.

[PS]:  Brilliant. So it's definitely driving action.

[EM-Z]:  It's very transparent. The comments are visible to everybody, so it's very transparent, so you can't really hide from it. And to your point, you do have to do something about it because there's no point listening. So the way you do it is to make sure that you are pushing people to up their score on a monthly basis and to address some of those issues. Because the reality is that there is commonality between most of the issues that people will bring to the table. Very rarely are they sort of ring fenced to one particular person. So then there are group- wide initiatives. So this time last year, for example, there was a lot on cost of living crisis, rightly so. We had, obviously, a change in government, inflation went high, energy crisis, the war, so there was a lot of that in the mind of all of our employees. So we took therefore a decision at the top level to put aside cost of living crisis grants that we could give to people. We put a hardship fund in. So if your boiler broke down, then you could come and apply at Iris and we would pay for that for you. So on a specific basis, we made sure for those that weren't paid a lot, that were paid under a certain level, that they got extra money for those six months of winter to pay for energy crisis. So sometimes it informs decisions that you're making at the group level.

[PS]:  Brilliant, brilliant. So we've got a team engagement KPI, a process monthly, which gives you that regular check-in. You've got accountability processes to drive the action, to improve the way people are being led and managed, because, ultimately, people leave a manager, they don't leave a business or a job. How do you know if it's impacting on the results of the business, Elona?

[EM-Z]:  Because I can see my staff attrition, and attrition is the biggest expense that a business can have, because if you think about it, you've spent a long time hiring somebody, and that's pretty expensive, because you probably do about ten interviews for every person that you're going to hire. And then you spend a lot of time training them and then they leave you. And sometimes they leave you because you have trained them so well that they can spread their wings and that's great, but sometimes they leave you because they've not been managed properly, they've not been set up for success, we've not trained them properly or we're not maximising them to their full potential, whatever it may be. And that is a big cost, because then I have to start again. Then you're paying another set of recruitment fees and you've got a lot of time out of your business interviewing, then you've got to ramp up and train again and all of that. So for me, attrition is the biggest indicator of staff happiness and how they're doing. And it's not always about money. People don't just leave because they don't get paid enough. It's everything else you do around it - the training, the development, the accountability, the empowerment, the culture for them to be themselves, the D&I initiatives you might have. Do they feel that you've got a social purpose that they are aligned behind? So, yes, they're coming to work to do a good job, but they're also doing good, they're also making an impact. That's super important. So all of that is... that's why when you first asked the question, I talked about culture more than just employee engagement, it's the holistic environment that you build. So, yes, I can see my employee Peakon score, but I can see my attrition improving and that's a massive improvement to my EBITDA.

[PS]:  Yeah, brilliant.

[EM-Z]:  Productivity, money, all sorts.

[PS]:  So that leads us neatly into the true north conversation. What do you mean by true north?

[EM-Z]:  Yeah, I think it's important for a business to know where they're going. I think it's important for a business to have a five-year plan of what they want to be, what they want to be known for, what is the mission, what is the vision? Where are they going? What are the big targets we want to hit? And then how you get there is the OKRs that you drive but you should never really forget your true north because I think it's super important, particularly, well, for all sorts. But if you are a small business, it is important to keep that vision and look ahead. Otherwise if you get dragged down by the detail or the problems of today, you might lose the motivation for what you're trying to achieve. So I think that's super important. And then I think it's important because it gives you focus. Because things change around us and we've got to dance with that and we've got to make sure that our business is flexible and our business is agile. But if you believe in what you're trying to do, and that still stays true, because obviously if you need to change direction, that's a different thing, then you've got to keep the faith going and you've got to focus and remove the noise from all the other things that are happening around you. You've got to control the controllable. For me, for example, the last twelve months have been quite tricky. Not just for Iris, but for every business. We had the war, we had, obviously, energy crisis, we've had unemployment. A lot of big businesses have made more people redundant. On other ends, we've got a lack of talent in tech, for example. So there's unemployment over here and then I can't hire people over here. Our employees have got a lot of price rises that they're having to deal with. Our customers are having to do the same. It's been quite difficult. Mortgages have gone up, etc. And you look at it and you go, right, okay, I started my budget. We're an April year end. So we decided our budget about February. So February 22 for the year that was going to end, April 23. Your budget is your budget and our budget was decided before the war kicked off. And it's what it is. And you can sit there as a business leader and you can feel sorry and you can feel a victim and you can say, oh my God, I can't believe this has happened. Or you can say, you know what, I can only control the controllable. I know where I need to go, I know what my target is. I have got a duty and a responsibility to the 3000 people that I am employing. For me, anyway. Others have got obviously bigger teams, smaller teams. And I can't do anything about what's happening around me, but I can focus my efforts on my business. So maybe we're not going to get as many new logos because people don't change vendors when there is a lot of change around them. But maybe I can work closer with my existing customers and understand how I can add more value to them. What products can I give them to make their lives easier, more efficient? I can always work on my employees because actually the last thing I need today is for my employees to leave me as well. So focus on keeping your customers happy, your employees happy, and actually, then the numbers will come. So I just think it's important that we don't deviate from what the business purpose is because of what's happening.

[PS]:  Brilliant. Let me pick up on that, just to bring a layer of clarity, because we work actively with all the firms in and around what we call strategic health. How healthy are you strategically? Within that conversation, we talk... two of the questions, two of the eight questions, are what's your vision, where you're going, what does it look like when you're done, within a five year window, for example? And the other is, which is why I picked up on the True North as the core purpose, because True North doesn't change over time, you know, the North Star is always there, which does bring focus, but the vision brings a different type of focus. Can you just elaborate on what you think the distinction between the two are, please?

[EM-Z]:  Between True North and your sort of...

[PS]:  And I think... purpose / vision. True north is, in our book anyway, and I'm open to dissuasion or persuasion here, Elona, true north is purpose, doesn't change. Vision, the goals, they might, because we can't control all of the stuff that's going on in the environment we're working in. Just wondering what your distinction is between the two.

[EM-Z]:  Yeah, so I agree with you. So I think your true vision is where you are heading ten years from now. For me, I look at it as a business or as a person going, when I wake up in the morning and it's now 2030 and I'm still working at Iris, in my case, what does that look like when I wake up? What sort of meeting am I walking into? What sort of customer am I seeing that day? What does that P&L look like? Is it a billion pound business? Is it 100 million pound business? Whatever that may be. So I think that is to your point. I think that is the bit that stays that motivates us. The vision is how you get there. And that might need to be agile, but the two have got to be linked. So the vision is how you flex your way of getting to your North Star, but without losing focus of your North Star. For example, I use it a lot when it comes to my buy-build and, sort of, partner decisions, because at Iris we buy a lot of businesses, and we have bought 30 businesses in my time at Iris. And the world is a big place, and you can go after a lot of businesses to acquire. But really, that decision that I make today about a business I'm buying has got to fully align with where I want to be ten years from now. So I have to ask questions today about what that business will do ten years from now before I acquire it. So I look at it and I go, this is a great piece of tech. I'm going to buy this business because I'm buying a great piece of tech that I do not have today. I can build it, but it might take me three years to build it. And good luck finding people to hire that can build it because obviously there's a shortage of talent. So I want to buy this and this fits greatly. But what am I buying it for? I'm buying it because I know my customers will use it. So I can't just buy it because on its own it looks okay. I have to buy it because I can integrate it to my existing platform and my customers will buy it. So there's got to be... does this match with what I want to be? I want to be a global player in accountancy. So this great healthcare business over here, it might be great, but I can't buy it because it doesn't fit to my true north. And the other thing is, the opposite is true as well. I might buy a business that maybe doesn't have a great tech, but it's got a great set of customers. Now, if I have that tech already, that's great because I can give the tech to the customers that I'm acquiring. If I don't have it, then I can't buy that business. It is as simple as that because I need to think of my world ten years from now and a business with old tech that I don't have a replacement for is not going to be around ten years from now. It's going to have to be replaced. And if I don't have that in my roadmap to do, then I can't make that decision. To your point, you're absolutely right. You've got to stay true to your true north, but then you got to flex in between to make sure that you're reacting to the world around you, but you are not compromising your future.

[PS]:  Yeah. One of the earlier podcast discussions was with the lead of Intuit QuickBooks, and not quite word for word, different tone, but very much the same message and as relevant to a small accountancy firm, to a large accountancy firm, to a 3000 person tech business. Would you agree?

[EM-Z]:  100%. As I said, I think it's even harder for a smaller firm, I think, because when you're first starting, I feel that there is a lot of foundations that need to take place when you first start a business, when you're a small business, and to do so, you're underground. You live in a nice house today, but you want to build a bigger house, a better house, which means that you've got to go underground first and you've got to build pipes and all of that to hold your big house. And that's not glamorous. That is not glamorous at all, building foundations. And the reason why it's not glamorous is that you can't see it, you can't touch it, you can't feel it. As I spoke earlier, the numbers are all looking negative because all you see is cash going out, there's not a lot coming in and there's not a lot to show for it. And you've got to keep the faith. And the only way to keep the faith is to stay true to your true north, to know the purpose, the reason why you are doing this and accept that these times are normal. And then eventually you are going to go above ground and you are going to build kitchens and bedrooms and beautiful living rooms and then that's the bit where it snowballs and it's great. Which is why having that great advisor next to you, I think is important as well, to remind you of the bits of the journey that are the norm. But as long as you're still heading in the right direction, then it's okay.

[PS]:  Forgive this very brief interruption. Elona is doing a brilliant job of unpacking what strategic health means for her business and your business. If you want to get a KPI on strategic health for your firm, go to the show notes and you can get access to the Strategic Health Assessment. You'll also find Business Breakthrough reports on core purpose and OKRs. And so you are familiar with OKRs? We are familiar with OKRs. In our view, it's the way you bring strategy to life by every 13 weeks, getting a big step sorted out, nailed down, tick in box. Would you just unpack for the firm leaders and managers listening to this, what an OKR means to Iris and how that might apply to an accountancy practice?

[EM-Z]:  Sorry, I don't mean to state the obvious, but it stands for objective and key results. So it's a way to run your business, to ensure that whatever your business objectives are, it's a way to make sure that your team are focused and they are focused on those objectives that matter. And the reason for that is that we're all busy people and on the whole, most people want to do a really good job. So when a new idea comes to the table, they go, oh, yeah, that's great. And the reality is we can be very distracted because there's a lot of new ideas and a lot of things we might need to do, but not all of them have got the same impact on your organisation than those that get you to your true north. So at Iris, we have four OKRs, for example, they are broad, but there's four objectives we need to achieve. On the whole, they are very similar. The targets might change, but the actual objectives are very similar every year. The reason for that is that I believe employees like to know where they stand. I think moving around and changing what your priorities are is not really that helpful. And the more you repeat the same message, the more confidence you deliver in your employees that they know where they're going. So your objectives have got to be big. So for us, it's making America a great success, because we have always historically been a UK only business and moved to America only three years ago. So it's a big objective and it's got a big target on it. Now everybody, and that's one of them, everybody has got a role to play. So if you are in marketing then obviously making sure that we take the Iris brand to America is important. If you're in finance, it's all about making sure that we can get the right amount of debt that we need to buy acquisitions, etc. So they mean different things to different people and those key results are, the K and the R that stand for key results, are how will we measure the success to hit this big objective? So I can have a big dream to go North America is going to be 50% of Iris. That's my big vision today. It'll be 50%. Those key results are the objectives that every individual has and it triangulates down all the way, it cascades down from top to bottom, to then hit those objectives. So at Iris we have got OKRs across each of our functions and then every employee has got objectives in our HR system and those objectives are linked directly to those OKRs. They mean different things for different people, but when you pull them together, they will get me to my Americas vision, they will get me to being the cloud provider of the year and have cloud be the majority of my business, all of that. So those things that matter to the business, they shouldn't change. I still would want to go be a global business, I still want to make sure I'm now a cloud provider. So those things stay quite high level, very fixed and then all the OKRs at the bottom, all the key results at the bottom, make sure that we're hitting those key objectives. The KRs do change as well. So what we do notice is sometimes we thought we were going to do one thing to achieve this objective, and it's not working out, and then you've got to come up with a new thing to do it. Because you still have to achieve the objective. The objective is immovable, unless you've got the wrong strategy and you're changing strategy. That doesn't happen a lot, but maybe it might do, in which case you drop it. But typically you would change the ways you're trying to achieve. And so we track things on a monthly basis and where they are red for too long, you've got to go, well, look, we can put a lot of effort on this one, but this isn't going to pay out. So what else can we do? What other things do we need to do? And it's really helpful when you have a lot to do. Genuinely, Iris certainly has got a lot of opportunity and people can be distracted. So it's very easy for any employee of Iris to look at those four and go, the thing I'm doing today that's keeping me busy, is it helping any of those four OKRs? And if it's not, then they can leave it and ask for forgiveness and not permission, because they didn't do it.

[PS]:  What I find, what I find of value in part of that, Elona, is the connection between... we've got the sort of overall big picture objectives of the organisation, but you're talking about... how do we, to use your word, cascade that so that every person who's in the middle of their day job has got a connection with something that joins the dots, to use a phrase from earlier, to what their business unit is doing and what the overall organisation is doing. Which means there's got to be real skill from, not an HR point of view, more a line manager point of view, in terms of reaffirming those connections, doesn't it? I mean, that's a skill that lots of line managers don't naturally do.

[EM-Z]:  And there's a lot of training that comes with that. So we've only been doing OKRs for three years at Iris, so we had to teach people what an OKR meant. In the first year, it was harder, and it gets better because obviously it becomes part of your daily life. But, yes, holding... I hold my executive team accountable to it. So we look at them at an executive level. I look at them every month for every function and then they will hold their teams accountable to it. And as I said, the objectives that have gone on to the HR system have to be linked. And you can buy great systems. This is not to advertise Iris, we have one. You can buy loads of systems, we use ours, and it will link it, it will go... you drop down, you've got a drop down list and it will link your objective to that particular, sorry, an employee objective to your big group OKR. And then on top of that, you've got to communicate, I think. It's really important that you don't just set these in stone at the start of the year and then that's it. They form part of the bonus scheme. So they need to be the way that people are incentivized, because obviously that's motivational for them and also they need to be communicated. So we have an all employee call every month and we talk about the same OKRs every month and tell people how they're tracking to those. And at the end of the year, we also say, this was your target, this is how we achieved it. And they've heard this every month. So it becomes, as I said, people like stability. They like the same message being repeated over and over again, because then it becomes part of business as usual and it becomes the norm and they recognise it. So if you communicate well across the board, when we're not doing well in certain areas, we tell them that. We say we're doing really well in these three, we're not doing so well here, so please, please, can you help us out? Last few months, we need your help, etc. We did that last year for one of our OKRs and it really helped focus the mind in the last quarter. And then you hopefully remunerate them with a bonus that you pay, because your bonus scheme should be aligned to those business objectives and if you've hit those business objectives and your employees helped you do so, then you have got to give back. So it all needs to be connected. You can't run objectives that are completely different to how people are incentivized of how they run their daily life. That's not fair to them.

[PS]:  One of the questions we ask firms, almost like the proverbial stuck record on a repeated basis, are you team-led or client-led or are you revenue-led? And then that starts a conversation in terms of which plays out best. I just wonder how you'd answer that question. Revenue, client or team led? Not led, first. Who comes first? Team, clients, revenue.

[EM-Z]:  That's a hard one, actually.

[PS]:  It's meant to be a hard one, Elona.

[EM-Z]:  Because your people look after you.

[PS]:  That was meant to be funny, by the way.

[EM-Z]:  It is customers first, right? You are nothing without a customer. But the reason why I say it's a hard one is because I don't want to make that sound like the team is not important, but there will be no jobs, there would be no business if you didn't have customers. So I think using your team and empowering them and enabling them to have a customer-first approach is super important because if you have customers, there will be jobs for your team. If you have customers, there will be revenue that is coming. Now, that doesn't mean over-servicing a customer, but it does mean that you have got to earn the privilege and the right for them to give you their money as opposed to give it to your competitor because they have choices. And as business leaders, we have got to recognise that our customers have choices. So you've got to look after them to the best of your ability. So we have values. I think values are really important for a business and the way you drive culture. Our values spell the word IMPACT, but there are six values and the C is for customer in impact and the T is for teamwork. So you've got to run a business that looks after both. But for me, you have got to look after your team and educate them and build a culture that says your customers matter. They are the real bosses. I have this chart that I show to my team a lot where we do the group chart and it's me at the top and it's obviously everybody else at Exco and then on top of me it's my customers. And I always say to the team, that's my real bosses. It doesn't matter. If you have an email in your inbox from me and you have an email from an angry customer, you have got to answer that angry customer first. Your CEO doesn't really...is not as important as your customer. That's certainly what I believe in, particularly for software businesses, because the majority of the revenue in a software business is recurring. So you didn't sell a licence that was perpetual anymore. You have got to earn that right for them to renew with you, every year. 96% of my business is recurring, so it's very difficult to get a new logo compared to looking after your existing base. So look after your customers and don't take that for granted is personally what I would advise anybody. But your team need to be looked after. But they've just got to have a customer-first culture, that's all, because the customers are paying fundamentally for their salaries. When you bottle it down, like with our customers, we don't have a business or jobs anyway.

[PS]:  And I know it's an unfair question, and I just think, well, you throw it into a Venn diagram, so you got your team, your customers and the revenue, financials, profits and so on. And that's probably... there's a framework there. Because you don't have customers if your team don't look after them.

[EM-Z]:  Absolutely.

[PS]:  It is a bit chicken and egg.

[EM-Z]:  It's very difficult, which is why you have to do both. And it's interesting because I do have that Venn diagram at Iris and in the middle of it it talks to one Iris. And I think that's something I would say to every business out there, that if your business is growing, particularly because they become problems of a business that is growing, especially if it's through acquisition, that you have got to build a one culture and one way of doing things, looking after those customers and looking after your own people. There's got to be foundations and processes in place to make sure that your business acts as one, because there is great power in that. One plus one equals three when people are acting together. If you work in a siloed organisation, that's not good for your people and that's not good for your customers. So I do have the Venn diagram that says great products, great happy customers, happy employees. And in the middle of it, it says, I will hit my revenue number because these things are happening.

[PS]:  Yeah, brilliant. Love that. Love that. Culture has cropped up a lot in this conversation and you've talked about your six values' impact, C being customer, T being team. I just wonder how... you also talked about accountability a little bit as well, in terms of accountability around objectives and key results and so on. What about accountability around your values? How does a business... because if there's no accountability around the values, they're just words. We're not taking them seriously, are we?

[EM-Z]:  Great question. Great question. So the A actually in impact is accountability. So I'll spell it. So it's Innovation. Making it happen because it's important we make things happen. There's no point in talking about it. You need execution. P for passion. That was a particular favourite of mine. I think you've got to be in a job where you're absolutely loving what you're doing and if not, go and find another... Everybody's got a passion for something, so go and find the thing you're passionate about because it's a long... spending 8 hours somewhere, it's a long time to fake it if you're not enjoying it. And so I think it's important we're passionate about what we do. A for accountability, C for customer, T for teamwork. So we came up with these values four years ago, just before I became CEO, actually. We hired a new Chief People Officer. It was the first job that I gave her to do because we needed to act as one business, one mission, one vision, one set of values. And we actually asked our employees. So our Chief People Officer sent about 100 different values to all of our employee, because there's loads of great words, integrity, trust. It's so difficult to pick one, if I'm honest. So they voted and then it was important for us that we spelled a word with it. And the reason for that, Paul, is most of the time people don't remember the values.

[PS]:  Yeah, you've got to recall.

[EM-Z]:  Make it easy for them. So we spelled the word impact, so we chose the words they chose, we spelled the word impact and then we play that into our culture. So today, from visually, because I think it's important visually people, know your values, they are everywhere. So my laptop today, you can't see it, but every desktop, every laptop of Iris, when you log in the wallpaper is the values and when the laptop goes to sleep, each value pops up individually and it's got a great sentence about each value. It's in every mug, it's in all of our stationery, it's in every office. So visually people recognise them and then what we do is we celebrate them. So every quarter we have what we call Impact Awards. So employees vote for other employees. So if we've got employee of the quarter, team of the quarter, manager of the quarter, and the voting criteria is that you have had to demonstrate one of these values. So you've been voted and then... Somebody will nominate and lots of people will vote. And then obviously at the Exco level, we decide the key winners, the big winners. But you have to demonstrate your impact values in order to be an Impact Award winner. So I think making it part of celebrating your culture is super important because they have to be meaningful to you. That's why you chose them. So make them easy. Have an acronym if you can, and then celebrate them and make them visible for everybody. I wouldn't be too hung up on being really meticulous about which words did you choose for your value? Because really the definition of… innovation, for example, there's a big definition behind it. Innovation to me is about building new products. But to somebody that works in a finance team it's about thinking of a new idea and coming outside the box. So actually all of these values are brilliant in their own right and they can have different interpretations that mean something to everybody. So I wouldn't spend too long on worrying about maybe I haven't got the right word, because actually you can bring... I don't have the word trust in my impact values. But that's not because I don't believe in it, but I can bring it into accountability. You can't hold somebody accountable if you don't trust them. I think as a business I would advise you to just choose some that are broad, create a great acronym for it, make them visible, go and celebrate them rather than spend two years deciding what your values are.

[PS]:  We're a big fan of get your employees involved in the process because then they'll own it and the employee...

[EM-Z]:  It's their value, 100%. And the awards - they have nominated themselves. We send them a reminder to say the window's open and they will nominate each other and then other people will vote on the nomination. So I think that's fantastic. It's very helpful as well if you're a business that's buying other businesses. Because when you buy a business, you are buying people. We are in the business of humans regardless whether we sell software, whether you're an accountant, whatever it is, it's all about human interaction. And when I buy a new business, I am buying a team. It doesn't matter how great that product is, without that team, that product would be nothing. So really, looking at their culture, looking at their values, if they had some, and being able to map them with my values and have that first town hall call that you do when you welcome them into the family to say, look, we've looked at yours, we've looked at ours, there's a great map. We're not here to change anything you're doing. We're here to give you a bigger family to be part of, and here's what we believe in, is a great way to integrate a new acquisition into your family.

[PS]:  Fab. I just love that and accountability around values. Yes, I get the celebrate and the awards and it showing up everywhere and so on, but across 3000 people there's got to be occasionally someone who isn't living by the values. What does a business do to take seriously the accountability and just challenge people that are not necessarily living those values?

[EM-Z]:  Yeah, good point. So I agree with that and I think that falls down to managers and it falls down to...

[PS]:  Manager skill.

[EM-Z]:  to training your managers. So we have obviously different levels of leadership within the business and our training is also called impact training. So the learning and development training we do for our people. So you go to leading with impact training if you are a senior leader and then you go to managing with impact training if you are a manager. And that is all evolved around those values. So we use a third party that helps us with the training programmes, but all our managers have to go through it and it's a great way for them to be in the same room as well and meet each other out and debate these things. But fundamentally you're walking out really understanding that in order for your team to be successful, they have got to live by those values that we have chosen that matter to us, and accountability is a key one to that. So you hold your managers accountable and then they should hold their teams accountable. I also do an email every Friday to all employees and a lot about the email is the achievements and what the team has done and where the team have demonstrated the values that we have. So there's a top and tail that is fresh every day, but then the bulk of the email is around what's happened at Iris and where teams at Iris have delivered with impact. They've been accountable, they've been innovative. So we have examples from across the business that get sent to myself and the marketing team to say this month or this week, this is what this person has done, they've demonstrated innovation. So I think, as I said, with culture, it can't be a fixed thing, but set up what your vision is. In our case, we had our impact values and then every day make sure that you are doing something to let your employees know that those things matter. And what happens, Paul, is that you get a lot back. There is a lot of effort that you have to put in as a team to start with if you didn't have those foundations in place. But then once you do that, employees are doing it for themselves, because actually they love to live in an environment where we know where we stand, we know what we're doing, and then they can call it out if things aren't done in such a way and then they can celebrate it when things are done the right way. But actually it becomes very heavy lifting at the start and then it's very much easier after that, because today we have employee groups for everything. We have D&I groups, green groups, charity groups and employees have come up with these ideas, not me, and they're part of them and they're making the change. And that's when you know that you've built it into your culture, because they're doing it without being asked to do it, because they love to do it.

[PS]:  Yeah, brilliant. We've got this thing, how do you spell accountability? And we say it's spelled H-E-L-P. So what you do is you help them, if it's not working. And what you've just said is that we help our leaders lead with impact, we help our managers manage with impact. We've built a training programme. So that actually what you're doing is helping them build the skill. Plus, and I've got this bee in me bonnet at the minute, if you aren't using the words enough, it's not alive enough. The words around your core purpose and your vision and your values, if they ain't showing up every day, every week, then it ain't alive. It's like you've got to breathe the words and then all of a sudden you stand a chance.

[EM-Z]:  100%. Couldn't agree more with you.

[PS]:  Marvellous. It's a good place to finish because it's not often I get anyone to agree me, Elona, but that's... But one of the things that underpins everything we do is challenge the person in front of you. Don't take it all for read. But I've really, really enjoyed our conversation today.

[EM-Z]:  Completely agree. And it gives you the platform, I think, as well, sorry, to drive great initiatives from top down that your employees will go behind. For us, D&I is a big initiative. It's everywhere, not just for us, everywhere. And it should be really important. But what you realise is how much it means to your employees. And employees today want to work for businesses that are focused on diversity, on inclusion. So if you're using top down, your OKRs, your true north, your values, whatever you have strategically that you have set and you cascade that down to your organisation, it does look after itself. And I wanted to mention D&I purely because it's one of those examples where... it upset me a little bit. Like three months ago I got interviewed by somebody who is a really well known interviewer in the tech industry and they said, how do you combine, balance the need for D&I and ESG with your P&L and the fact that you are a PBAC business and you've got to look after your money? And it really, genuinely upset me that people still think about things like ESG or D&I as if they are hitting our P&Ls rather than they are making our businesses better. And it's another good example to look back to where we started. What do the numbers mean? There is a quantity thing and then there is a quality thing, and actually having more diversity at the table makes your decision making far better. It makes your staff attrition far better. It means you've got access to a pool of people. Why do you want to ... we already have a war for talent. Why do you want to fish in the same pool when there is a war for talent? Why don't you open that up? And so for me, those small costs, and they are very minute, very small, that are associated with an effort around D&I are so worth it. They give you back 100 times more in terms of employee engagement, business purpose, decision making, higher quality business. So I think being an accountant and loving my P&L, I also am really proud about the quality of the businesses we should build as business leaders. So I would advise everybody, I would advise everybody in my position to look at this as a privilege we have been given to lead businesses. So we should use that privilege to make an impact socially and improve on the diversity scale so that the next CEOs that come after us ten years from now don't have to worry about it. They don't have to worry about the metrics, because it's just a basic requirement of how we make businesses more successful, and our businesses are valued far more because of it.

[PS]:  Brilliant. Absolutely remarkable. Elona, our core purpose, our North Star, is to help ambitious accountants humanise the numbers. I think our conversation today has unpacked how a business can, should, does humanise things around the team, around the customers, whether it's your existing team or you're buying a team or you're recruiting. I've loved this. Thank you very much for taking the time out. I really appreciate it.

[EM-Z]:  Thank you so much, Paul. I've really, really enjoyed it. Thank you so much. Thank you.

[PS]:  You'll find more valuable discussions with the leaders of ambitious accounting firms at HumaniseTheNumbers.Online. You can also sign up to be notified each time a new podcast is made available.