Is it worth the time, the effort, the energy in talking strategy in an accounting firm?
Well, this was a question posed to me by ACCA.
So, on this podcast you'll hear Douglas Aitken, a colleague of mine, and I talk about the core elements of strategy and how those core elements can deliver a true return on investment for you and your firm.
This is podcast 1 of 5 in the ACCA Strategy Series.
"It's been proven in numerous studies that businesses with a really strong sense of purpose grow exponentially faster than those that are just commercially led.
"I think a better way to describe it might be a North Star. It's always there. It's in the sky forever. And any doubt about where we're going, let's find the North Star again and that then provides a really interesting reference point for decision-making."
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TRANSCRIPT - unedited
Paul Shrimpling: [00:00:00] This is podcast one of five of the ACCA strategy series. Welcome to the humanized, the numbers podcast, series leaders, managers, and owners of ambitious accounting firms, sharing insights, successes, and issues that will challenge you and connect you and your firm to the ways and means of transforming your firms results.
Douglas Aitken: [00:00:28] Businesses with a really strong sense of purpose. You know, it's been proven in numerous studies that the grow exponentially faster than those that are just commercial led. I think, you know, a better way to describe it might be a north star. You know, it's always there. It's in the sky forever. And any doubt about where we're going, let's find the north star again and, and then provides a really interesting reference point for decision-making.
Paul Shrimpling: [00:00:58] Is it worth the time, the effort, the energy in talking strategy in an accounting firm? Well, this was a question posed to me by ACC. So on this podcast, you'll hear. Douglas akin a colleague of mine. And I talk about the core elements of strategy and how those core elements can deliver a true return on investment to you and your firm.
Let's dive into that discussion now.
Douglas Aitken: [00:01:27] Okay. This time of year Paul often thoughts, turn to planning resolutions, even in the new year. But a lot of people think about planning the year and what they want to achieve and whatnot which leads us to thinking of strategy. But I want to focus on strategy in relation to accountants in particular.
And you know, why the moose, the cane instance avoid talking about or doing anything about strategy? Why is that? Do you think?
Paul Shrimpling: [00:01:57] Well, I couldn't do the chase right at the beginning of Douglas. I think partly because. The connotations of strategy are impractical, you know, that's it's a talking shop, lots of words.
Lots of chat no action and no return on investment. So, you know, strategy is almost seen as an excuse to waste a load of valuable time and money. Therefore in, okay. What might seem to be important topics, important subjects, but because ultimately the output, the outcome of that strategy conversation is maybe a document that gathers dust and doesn't actually influence the business in generating return on investment.
So I think that's probably the primary reason, I think maybe also there's A lack of clarity as to what what, what strategy actually is. And you use the word planning planning's as good, a word as strategy a or B it sometimes has. A different time connotation. So if I bounce the question that you Douglas strategy, what sort of timeframes are we talking about when we talk
Douglas Aitken: [00:03:03] strategy?
Yeah. And, and my heads Paul, I, I think about a team theme of about five years or so. And, and there's a reason why we choose that. I think, you know, if, if we go to a timeline that's less than five years people start to, especially accountants start to think incrementally or even in quarters. So see, we went for a three-year timeframe and most acquaintance heads that equates to 12 quarters and tends to lead us towards incremental change.
When in reality you know, strategy can sometimes involve dramatic change, which. Sometimes lends itself to a longer timeframe. Now let's be clear, 10 years is too far. Anything can happen in the world in 10 years, but five years feels far enough a way for for for it to, you know, for us to imagine dramatic changes.
And and our lower brain, the freedom to fix some of those issues, but it's also close enough to make us think. Yeah, that's still within the normal bones.
Paul Shrimpling: [00:04:12] So hang on a second Douglas. So th this five-year window is almost What's the phrase beyond the pale for accountancy firms, particularly if, for example, as we're recording this in January, they're in the, you know, they're in the thick of the blood and bullets of self-assessment seats up you know, to contemplate a.
Five year timeframe just seems implausible impractical is isn't there. There's gotta be another way of looking at this that gets any business owner nevermind in accountancy firm owner to contemplate a five-year piece. What's the, what's the payoff. What's the pitch that. Works out and, and, and, and shows that a five-year window is the right timeframe.
Douglas Aitken: [00:04:53] I think there's two elements to that poll. And it's an interesting point, you know, for, for businesses who are not used to thinking strategically. Sometimes giving a time window that, that allows them to open their mind as important. So Haynes moving away from, you know, the, the relative short term, anything up to, you know, three years or so and moving into.
An area where had yes, there might be discomfort. But also it's far enough away to give us a different perspective on things or to allow us to see things from a different angle. Of course, one strategy is in place. You know, a lot of businesses tend to refresh every year, so it's not their fresh, what?
Sorry, refresh the strategy. Okay. So have a, have a good look at things again. And just to say, you know, is this still valid and go through the exercise, but in a different way, acknowledging that there is a good strategy in place, does it remain relevant? Does that acknowledge the, the trends that are going on about us?
Does that acknowledge the challenges and risks within the business and the environment in which we operate? And is it still fit for purpose? And if that's the case then yeah. The, the refresh exercise tends to be very straightforward, but going back to the five-year window poll, it can be daunting. I think when we look at if we imagined the blank sheet of paper, but I think it's also important technology that are tools and techniques that allow people to anchor themselves to envisage the future.
So, you know, take knowledge, trains, for example, and just to cautiously dip the two into the, the future of a Luca, you know, what it might look like and acknowledge that within the business model.
Paul Shrimpling: [00:06:49] I think what what see, and, and, and I know it's worked for my business as well, is that I'll go well, I've got some goals for the year.
With a bit of a long-term longer-term perspective. And you, I think you made the point about that's sort of an incremental, this is where we are now. What do we bolt on to what we've got in order to change the business as opposed to a five-year window where you're going, hang on a second, start with, choose your phrase, that blank piece of paper.
What do you want it to look like at the end?
Douglas Aitken: [00:07:18] Well, that's a good point. Actually, Paul, so I guess the question for you is, you know, how, how has that five-year window impacted on your thoughts on strategy because you have actually gone through it and in terms of your own business,
Paul Shrimpling: [00:07:33] I have an, you know, interestingly I've I've, I've set out, started every year in business, been in this is our 14th year at remarkable practice.
And I've started every year with some very clear goals on what I want to achieve personally, and for the business in that year. And, and sort of ignore that strategic piece up until recent times. And now we're looking at, and it's not just me. It's the whole team. We're looking at a five-year perspective for the, for the business.
And. It's I'm tapping into great zeal for the business then I've actually had for quite a while. I know I'm not known for being a unenthusiastic and an energetic but I actually tapping into a, a deeper pool of motivation and enthusiasm that then I've had for awhile. Partly because I know where I'm going.
And partly because I've I've set goals and not achieve them so many times. And, you know, I'm sure lots of people listening to this, there'll be in the same boat. And it's sort of I've concluded. It doesn't matter. It's you know, that that bit does mate. It's the fact that you've got something worthy, you know, to chase now one of our values, and I'm going to pose the question to you in a minute, but You know, we've been very clear about the behavioral values in our firm for, since the get-go, since we started.
And we've got the three core values be wholehearted do worthwhile work and do stuff that's worthy of notice. And I look at what we're doing around the five-year strategy for remarkable practice and all of a sudden there's that, that. It's more worth, it feels more worthwhile than it did before.
And it's certainly worthy of notice more than it was before. And as a consequence I've tapped into that resources have been even more wholehearted than I was before. And I think it's not just me. You can see that coming from the team as well. Can we
Douglas Aitken: [00:09:13] explore that just a little bit for the poll because I'm interested and I'm sure you know, any listener You know that that's tapping into this just now has a real picture in their head right now of Paul shrimp playing on juice, Judas L bunnies, but today's either which is quite an alarming thought, but what's, you know, tell, tell me what's behind the increased zeal.
What's changed. The, you know, and in terms of that planning process that brought a different energy.
Paul Shrimpling: [00:09:44] I think it's A greater sense of confidence and certainty that April on the right path and B where we're likely to get somewhere near you know, w we're looking at you know, be quite open about it.
We're looking at a business that's five times bigger than it is now in five years time. And it's like, that's just almost ridiculous. And yeah, but what if it's only doable? Well, if it's only doable, you know, that's still pretty good in a five-year window. And so there's the numbers part of it, but it's not just the numbers part of it.
It's the the, the humanity of and that is tapping into you know, our core purpose. If you will, the, you know, humanize the numbers is connecting people to numbers, numbers, to people in such a way that it means more. And actually what's happening for me is it means more to me than it did before.
Partly because it's clearer. Than it was before. And, and actually I can see a path to achieving it. You know, people talk about a strategy about back being vision and goals and values and, and, and those things are important, but it's not enough, you know, vision, values and goals. It's just, you know, they're crucial cornerstones of strategy, but not enough.
So you know what we're posing and answering, you know, a number of questions with those things, but just having a goal, just having a vision isn't. Isn't enough. You've got to have a, a route map to answer your question in short, what I've got, the, the reason I've tapped into greater Zealand energy is because of the route map.
Now don't get me wrong. It feels almost ridiculously ambitious almost but it, it is so is it over ambitious? Well, all the businesses have grown faster than the one we're planning to grow. So all the people who've done it bigger and better than we have. So why couldn't we do what we've set out to do so, and it's, and I think, and it's strategic.
It's not just about me and Kate, the, you know, the owners of the business at the moment. It's it's about the whole team, you know, can we tap into that greater Zealand energy from the team? I've just read some research from a very large Gallup study, across 182 countries and across those countries and millions of employee surveys and the, the research that comes back, it's quite frightening.
It says that 15%, one, 5% of people are fully engaged in the work they do. And you got, you're having a laugh 15%. So what they're saying is 85, 5% of people are not fully engaged in the work. They do, you know, the jobs with it. Gallup don't use that language and I'm sure that's not the case in the UK in isolation.
I'm sure that the number that will be better than stronger than that. Pretty confident but gullet don't isolate the UK numbers. So it's hard to, hard to see. And I'm certain that in a professional service world, like accountancy, the numbers will be higher again then than the UK. But even if we get them up to 50% or 60%, or even 70% fully engaged, the still, you know, 30% of people not entirely engaged in the work they do.
Well, what if I'm having crystal clear strategy shared with the team? You know, like you say refreshed every year, it's not just a one-off thing. And I don't think a refresh every year is in north and I'll bounce that question. I've got three questions for you now. Is, is he north? And certainly it's it's not enough for me.
So so there's that I think strategy is a vehicle to use that, that enables us to tap into greater resources within our team. And if we can tap into those resources, even if we haven't got crystal clear path, As to where we're going, but we've, we've got a north that taps into that energy and those resources and the motivation and drive then all of our businesses are going to be better.
Anyway. So let, let me pose the question to you. Cause I've, I've there's a few hanging there. One's on on, on values, which isn't about vision and goals. It's about behavior standards. What, what, how important do you think that is? As a, as a, as a cornerstone of
Douglas Aitken: [00:13:54] strategy. Well I think it's crucial, Paul, I think value.
Firstly, what do we mean by values? In my head volumes is your, your code of conduct. If you like tells people you know, so they knew how to behave. I think that would be a nice way to Peter as well. And of course, you know, a certain level, everybody knows how to behave, but what we're doing is isolating certain things.
What we're doing is isolating certain things that that. Really provides a lot of direction a framework, if you, if you like in terms of expected behavior from people, so, and forms not just the, the, the internal team. I think there's a far wider application with values that, that people overlook.
For example, in recruitment if we have a very strong values suite, if you like, then it gives us a, a real benchmark against which we can gauge potential new recruits. So suddenly we're not just looking at technical competence, we're looking at how are they going to fit in here? You know, what, what are they going to bring that sits within that cotton value set that gives us comfort that we've got the right person.
So it really gives us an additional framework. And I think what, what businesses have been doing of late Paul, you know, let's call this the, the 21st century business model that they're taking the values outside the organization. So they're being very explicit to the outside world about what the expectations are of the people.
Now, you know, it's a really interesting move that isn't it, but I think it's a really shrewd move. Because why shouldn't we be proud about who we treat of people or what our expectations are of our people? So values, I think are one, I would put them in the top three cornerstones of any business planning strategy one of the key things to get right.
Paul Shrimpling: [00:15:58] business, but is isn't this another one of those? Yeah, let's, let's, let's get clear on our values and let's put it on a nice plaque in the office and in reception and on our website. And then forget about it. Isn't isn't that sort of what happens with
Douglas Aitken: [00:16:11] values? It can be an, and let's be clear that we've seen that you know, in, in a number of occasions but equally it's also very visible and farms that get it right.
The dramatic difference that it can meet. And yes, we're talking genuine ROI here. You know, that the values that are lived. Our, our values that are properly inculcated within a business. So the people exercise, I'm gonna say, okay,
Paul Shrimpling: [00:16:38] hang on, hang on, inculcated too many syllables for me. What do you mean inculcate
Douglas Aitken: [00:16:42] embedded?
Yeah, let's, let's see embedded Lyft, Lyft is probably more straight forward, properly being lived. And, and what do we mean by that? We mean that. They are that they are being lived and exhibited. Every day and that their behavior that we are, the explicit behavior that's being looked for in the values is being sought out and demonstrated and reinforced on a daily basis.
It's important. Yeah to get it right. So it's almost like you know let's call it a scorecard. I'm not sure if that's that eight connotation of Paul, but let's stick with that. Just know it's almost like covering a scorecard where we are. We are actively measuring and seeking out those behaviors and people reinforcing them when we see them done properly.
And also the, the flip side, holding people to Kane queen, we see behaviors which don't follow the values.
Paul Shrimpling: [00:17:44] Which I thinks you know, accountability is Something people shy away from Douglas, you know, accountability to performance numbers is, is hard enough, but accountability to behavioral standards where there isn't hard measurements attached is arguably even harder.
Douglas Aitken: [00:18:03] So let's talk about that then Paul, in relation to acquaintance in particular, because, you know, let's be clear in, in terms of an acquaintance training and background and qualifications and you know, the, the way that the R it's it's all about the numbers, isn't it. So when we are talking about as we are here, humanizing the numbers and bringing a behavioral element to you know, to our firms, how, w how easy is that for them?
Paul Shrimpling: [00:18:34] it's not, it's not easy. It's not easy, but I guess, you know, this conversations, you know, strategy is not easy, you know, establishing a set of values. Isn't easy holding people to account for a set of values is. Is it harder still? But I think I think if you, if that's a question that you're posing, I think there's it's okay.
I think a good question to ask is how do we hang on to our best people and recruit more brilliant people? Yup. And then you go, right. Well if we've recruited the right brilliant people that fit with our values, And we fail to uphold those behavioral standards in someone else in the team, we sending a message to all of our best people that we're not serious.
And therefore run the risk of you know, if not losing our best people and certainly de-motivating or de moralize demoralizing them to some degree and therefore no longer tapping into their full resources and capabilities and motivations. So I think, and there's some interesting research in that David Mason did a couple of decades ago who was, you know, recognized as one of the Uber gurus of the professional service world.
In his research that he published in a book called practice, what you preach. And there was four cornerstones. And and if you're gonna ask me what the four are, I might struggle, but I know one of the cornerstones was the perception of standards of our fellow colleagues. And it's, you know, what standard standards to the behaviors that we agree, the right behaviors in our firm.
And you know, when that was high, the performance of the firms was 20%, 30% higher than the norm. Yeah. And, and okay. That's, that's anecdotally referring to a book I read to you in 15 years ago. But I do refer back to it often, you know, so there's a an I have, I can recall all four because I used to go from step from stages.
This is what David Mesa says. It says, what you should do is sack your people. And that's a SACC So the four cornerstones of high-performing professional service firms were make sure you've got and build a sense of satisfaction. Within your team. And that was make sure you got the right people on the right seats on your boss, in your business, you know, square, peg square hole.
So someone who's not comfortable communicating with clients and don't put them in a highly focused client conversation role. So there's that, you know, square, peg square hole, bit satisfaction a sense of accomplishment. C commitment of our colleagues and the other C is make sure there's a sense of challenge.
And and, and I think, you know, that commitment from colleagues taps into this values conversation and the accountability piece, which isn't easy. But does pay off. There is an ROI in the way you can keep and tap into the resources of your best people and maybe set your firm up to recruit other brilliant people into
Douglas Aitken: [00:21:22] the firms.
And of course, that, that kind of echoes there. Serrato research as well. Doesn't it? Paul we're absolutely. The three criteria were very similar for our call. A sense of fairness, a sense of achievement and a sense of camaraderie and, and what really came to mind. There was the. You know, the, the sense of unfairness, if people aren't being held to the same for their behavior, isn't it.
So that impacts on, on the top people, they see poor behavior or anti values, behavior being accepted. And that's what switches them off. Is that
Paul Shrimpling: [00:21:57] fair? Yeah, it is fair. Absolutely. So let's just go Serota research at 13.6 million employee surveys. This is not like a Gallup study of 500. This is the biggest research too.
They have been able to find into the, into high performance, high performing teams. And yeah, they say there's, you know, there's three things. Sense of fairness, as you say, sense of achievement, sense of comradery, but of all three, the, if you haven't got a sense of fairness, you don't stand a chance of building a sense of achievement or a sense of comradery.
And one of the, you know, what are the cornerstones of a sense of fairness? Well, people are paid fairly and there's, there's a number of elements to that. People feel their jobs safe, which in the current economic climate is a bit of a challenge, but there's, you know, there's work that we can do. And people are treated equally to a set of standards.
So I think you're right, but if I can just twist this conversation into a slightly different direction Douglas, which is one of the other questions that flagged up in my head. So you post you quiz me around Y strategies worked for me in terms of tapping into energy and resources. And, and I said, well, we've got a crystal clear view now as to what we stand for.
Which is, you know, humanized numbers, connect people with numbers in a better deeper way. And then all of a sudden you stand the chance of tapping into a greater resource than you ever, ever, ever would have done, which enables you to transform your practice. Okay. So shouldn't firms sentence, have some crystal clarity, therefore strategy isn't part strategy, getting clear on what the core promise core purpose of their furnace.
Douglas Aitken: [00:23:30] Yeah. Yeah. I think it's a really interesting point because You know, for many acquaintance having having a sense of purpose is not really something that you've thought about before. You know, I, I,
Paul Shrimpling: [00:23:44] I disagree. I disagree.
Douglas Aitken: [00:23:45] I know I I'm explaining a bit I'm coming from. Yeah. Because
Paul Shrimpling: [00:23:49] no, I'm going to say, I found it.
Isn't the purpose to make money Douglas.
Douglas Aitken: [00:23:53] Well, yeah, and, and I think, you know, when we, when we ask acquaintance questions, leak that that's one of the answers that we get. But when we changed the question poll and ask them, you know, why, why do you really exist? You know, what, what do you want to be known for deeper questions around business that, that maybe personalize it to them?
You know, why did you get your bed every morning? And, and once you get past the making money and you know, to do a Cane's and blah, blah, blah Well, you know, what, what we've found is that a lot of acquaintance actually do have a deep seated purpose. You know, they'll answer that question by you saying things like, well, I want to help my clients.
I want to see my clients succeed. I want to, you know, help that family business that's been around for 80 years. CardioLAN on for another 80 years, you know, most when you tap into it really do have a deep seated sense of purpose around what they do. They don't articulate it. The best way and the certainly don't lead with it in terms of the messaging.
And I think the, the the challenge for the profession as a whole is to start uncovering messages like that because they create a real emotional connection, not just with clients and with team members, but with the owners themselves, because, you know, let's be clear as a business owner, we can sometimes get disconnected.
From the very reason that we started up in the first place and we forget
Paul Shrimpling: [00:25:29] and all the busy-ness yeah, just busy, busy,
Douglas Aitken: [00:25:31] busy, busy is he doing? And we accept too readily that our lot is to work seven days a week for a pittance of a P that that just seems to be the acceptance that that's life as an SME business owner.
Well, it doesn't have to be that way. And I think what we are, you know, what we're finding is that. Businesses with a really strong sense of purpose. You know, it's been proven in numerous studies that the grew exponentially faster than those, the adjust commercial led, and it may be a poll that, that, that sense of purpose, I think, you know, a, a better way to describe it might be a north star.
You know, it's always there, it's in the sky forever. And any doubt about where we're going, let's find the north star again, and then provides a really interesting reference point for decision-making. You know, when we're, when we're, day-to-day absorbed in what we're doing, sometimes we're challenged with situations and whatnot, and just occasionally looking at the north star.
Might inform our decision. And then when we go back to a conversation of a few minutes ago around values values also then provides great input to that decision making process. So suddenly you've got two reference points that. You may not have you may have had subconsciously, but because there are no fully articulated upfront and center invisible, suddenly they provide a real framework and reference point for any decision-making.
Now, if that applies to us as a business owner how powerful can it be for our teams as well? Hmm,
Paul Shrimpling: [00:27:12] not, well, I think, you know, w w you know, you posed the question at the beginning of this, do you know why, why is it accountants avoid strategy? And my answer was to a degree because it's loaded words, no ROI that, and it's a document that gathers doest.
Well, actually, if, if a good strategic process enables you to get crystal clear on the core purpose, the core promise of your business, and also crystal clear on the behavioral standards of behavioral values that you've got for your business, and those things show up every week in the firm. You know, that's not, that's not gathering dust is, it is actually, yeah, it's influenced every decision or not every decision, but, you know, key jugular decisions.
It could be every decision. But it's influencing decisions on a daily, weekly, monthly basis and therefore influencing action on a daily, weekly, monthly basis. That's not strategy gathering dos that strategy coming to life. Yeah, absolutely. It's yeah, I think that's that's stunning. That is it's I'm reminded of Peter Drucker.
He was arguably the most referenced business mentor guide, coach, consultant, whatever you want to call him. And he talks about our team being volunteers, we have to treat our team like volunteers just as we, as business owners are volunteers as opposed to employees and even extends that and says, look, you know, people volunteer for stuff, not to earn money.
They volunteer. To do things because they care deeply about what it is that they're doing, whether it be an environmental project, the local sports club you know, a church, well, a book club, whatever it is, you know, people invest time, effort, and energy, you know, you know that it means a lot to them for no pack.
Yeah, absolutely. And that's what we're looking to tap into. Isn't it, there's an ROI there. If we can get into that. With our team by having to do the hard miles, strategic miles, strategic work in working out what that crystal clear purpose or promise is. And then we'll, again, we stand the chance of you know, elevating the drive energy and enthusiasm for what we're doing as a firm for ourselves as business owners and leaders for our team.
For our customers as well, because I think your point earlier about values is important. We need to go public, we need to share, we need to almost campaign what it is we stand for, what is our central purpose and what our values are. And, and, and as opposed to it just being a framed piece in reception or a page on your website, because that just looks like.
Marketing BS to me.
Douglas Aitken: [00:29:46] Yeah. I think the, the, the beauty about going public with that poll is you know, there's a number of facets to it, but a couple that I'd like to pick up on us one it, it's, it's a very visible way of telling the wattle taught you to boat. So that, that in itself breeds accountability.
And, and in the, in the wattle that we're in, just know people can deep dive on your, you and your business effortlessly. So the, they can find out very, very quickly whether or not your your purpose message is authentic or not. Now, this is a really interesting point where, where we've seen some surveys where some businesses have treated it as marketing BS, and they've been found out very, very quickly, and it's actually negatively impacted the brand significantly.
Paul Shrimpling: [00:30:38] got to, you got an example of this?
Douglas Aitken: [00:30:40] Yeah, there's been a few. Well, if we, if we look at even in the plan they make 'em Paul, I think we saw a number of examples of purpose led businesses who reacted naturally and, and wanted to help because they were purpose light. I'm thinking of you know, people like BrewDog or, or Leon, the fast food company where they, they shifted the focus temporarily.
Just to help out and burritos case it was big, it was hand sanitizer and Leon's case. It was distributing food to, to key workers and care workers. Because that was what was needed at the time.
Paul Shrimpling: [00:31:17] None of this Douglas, you going to love this? I didn't in, in did some background research into the purpose piece, which you know, I've been doing there was a, there was a, there was a line on the Leon website.
And connected with their purpose and in the line was if God did fast food.dot dot, and you go, oh, okay. So that purpose is, you know, so I left. If God did fast food, then They rewire the logistics that feed all of their restaurants in order to feed the NHS, which is exactly what they did. And if God did fast food, they'd look after the planet.
And you know, Leon's food is, you know, focused that way. As opposed to what would be a counter. Version of that, you know, the opposite if you get it wrong and it's just a BS, marketing tagline type thing.
Douglas Aitken: [00:32:03] Well, you look at, is there an example? Look at companies like Wetherspoons where you know, the, the way that they were seen to be treating the people was you know, they, they generate as a significant backlash.
You know, and even now to this day, I meet people who are saying, oh, I'll never drink in our weather Springs again. Yeah,
Paul Shrimpling: [00:32:23] because they just got the message wrong because they're not really you know, it was a focus on making money as opposed to maybe as opposed to a focus on something that was deep, meaningful, worthwhile, worthy, worthy, if notice.
Yeah, exactly. Yeah. Very good. All right. There was, I think, yeah. W we need to to, to wrap this up, so we've covered quite a lot of elements of what strategy is, but I guess we've, we've not gone well. How do we define it? How do we define strategy? And I, you know, I think for me, it's, it's got to come to life on a daily, weekly basis in a firm.
And, you know, we've talked about how that happens around a central purpose, core purpose, what you stand for, what difference do you want to make in the world as an accountancy firm? In your community. We've talked about values being lived on a, on, on a daily basis, acknowledging the challenges and, and trends that are, you know, you, you know, if we would talk about inevitable trends and unyielding on yielding rocks or things you call them you know, we call them things stable in time.
So th th these aren't airy fairy on intangible things, they're really quite concrete that facilitate and help the, the firms install and implement, cause isn't strategy, something that, you know, when you talk about living values it's something that has to come to life, isn't
Douglas Aitken: [00:33:44] it? Yeah. And it's a really good point.
Paul to avoid the, the very thing that you talked about Adelaide, which is, you know, a piece of paper gathering dust on the shelf. You know, that that's the danger of just creating a strategic picture if you like. So there's a number of elements to it, which you've touched on purpose is, is most definitely one.
And, and values provides that behavioral framework. There's a couple of others that I wanted to touch on. If I can. I think, you know, one of the, one of the cornerstones as well is knowing how you'll succeed which you could probably subdivide into you know, knowing exactly what you do and how you're doing it.
So what would
Paul Shrimpling: [00:34:26] also, it's where you're going as well. Isn't it cause success, you've got to have a reference point, so it's good to get clear on where you're going. Yeah. But you, you're not talking about that, particularly. I E what is it you're trying to get to?
Douglas Aitken: [00:34:36] I, I am embedding the the kind of vision piece as well, Paul, but I think the, first of all, knowing exactly what you do is, is quite an interesting one.
Isn't it? Because a lot of people tend to default to well, I'm an accountant, so I do a canes. Whereas actually you know, maybe the question should be, what business are you in? And if we frame the question in that way, sometimes we might take ourselves to a different, a different place. You know what business came then they're in the professional service business.
Hmm. And, and my view, which automatically then has connotations of serving clients and being very client focused and taking the accent away from the product or the output of what we do. So, so being really clear about that can, can help businesses, but I want you to touch on that the one area. Which I think is the, it's almost like the bridge between strategy and being able to implement on a day-to-day basis.
And we call knowing what's important right now. Now, you know, there's a lot of research gone into what we call OKR is objectives and key results. A lot of the big companies, Google you know, Amazon, they, they follow a model where they loop every quarter. And what's important right now. No, it's not just acknowledging you know, a set of priorities to deal with the heat.
And now it's also with a Luca that five-year picture of where we want to go. Yes. Looking at the vision quarter checking values. And then it's acknowledging the cotton challenges and risks. And within that whole framework is deciding. Okay. Within that framework. What's your top priority for the next three months now?
You know, Paul, you know, in front of us, I've done this properly. You know, what number of OTRs are we actually talking about here? Are we talking about sweet of a dozen or, you know, what's the right name?
Paul Shrimpling: [00:36:44] Well, it's never more than three. Yeah, and it's never more than three just because you know, people's bandwidth is is, is already committed, you know, we've everyone's got a day job, you know, that they're responsible to deliver results on a daily, weekly, monthly, quarterly basis.
Which is the nuts and bolts of you know, earning the money, doing right by your customer you know, daily, weekly, monthly the strategically though, is it. If all we do is the, you know what we do daily, weekly, monthly, and don't do something which moves the business forward by definition. We're actually doing, as you move in the business, you're moving your firm backwards.
Yeah. You know, there's, it's standing still is not an option. You gotta be you know, responding to the trends. You know, the, the, the key influences, whether it be the shift in technology, the shift towards environmental consciousness, that shift towards whatever, you know, there's lots of things, influencing people's attitudes and approaches to the way they're living their lives and therefore the way they're buying their products and services.
And so you've, you've got to acknowledge all of that ignore it. And you become less and less relevant to your customers. Yeah. You know, strategy has got to make your firm as relevant in five year's time, three year's time, two year's time, one year time to, to your, to your clients and your community. And what I find interesting and what you just said.
And I know we chew the fat over this quite quite often is what we've essentially done on this discussion is go strategy. Isn't something that gathers dust it's. Yes. You have a kickstart kickstart process that defines. The strategy of the firm, you know, long-term big picture, you know, blank piece of paper thinking.
That creates a vision and a set of values and a central theme and purpose for the business acknowledges the challenges and risks that the business faces, you know takes into account the trends and shifts that are taking place so that we remain relevant. And, and then we refresh it once a year. But actually what you've just said is every quarter we make sure we do one, two or three things every quarter that moves us along our path towards our vision.
Yeah. And then if you do that, there's no way there's no chance of your investment in time and money around strategy. There's no way it's going to gather dust. Hmm. Cause it's the values of coming to life every day, every week, every month, you know, the, the, the central purpose and central promise of the business of the firm is, is alive and living.
It's not just a tagline. It's not BS. It is real, it's genuine. It's authentic. And it sounds as though what we done is had a conversation about building in deep rooted health, into the firm of accountants. You know, we're talking about the health of business, just like as a human being, we need to drink water.
Yes. Good food do exercise and not over consume what consume the right things, do the right exercise emotionally connect with the people we love. And so there's lots of things that contribute to a healthy, rounded individual. Likewise. Lots of things that contribute to a healthy and rounded business that you can be proud of that achieves the results, because we've not talked much about profit here, but ultimately, you know, profit cash and capital value growth comes from where comes from doing the right things and actually the healthier the business.
The more you're gonna be able to enjoy it as well as feel pride towards what you've achieved for yourselves, your colleagues, your team, your employees, you and your clients and your community as well. Yeah. That's been brilliant Douglas, thank you for acting as a sounding board. I'm not sure who was leading that or, but it doesn't matter.
Does it, it just, I just felt like a really healthy capture of and summary as to what, what, what strategy actually means. If you got any parting shots.
Douglas Aitken: [00:40:22] I really enjoyed it, Paul, it was a good good explanation of it. And I think your summary at the end there was really good. And in terms of the impact that it has on not just on you as a business or not, but on your clients and on your team and on your community.
So yeah, really, it really makes sense.
Paul Shrimpling: [00:40:41] Yeah. You know, if there was an action for people to take, is it just Google firms of endearment? Hm. So just Google firms of endearment, and it's a whole suite of businesses that have got connected to their team connected to their central purpose. And if you scroll down the homepage, you'll see a graph and it compares the performance of firms of endearment with the performance of the good to great companies.
From Jim Collins, his research, which shows firms outperforming their best and most effective competitor think he, he, he talks about 11 companies in that. And then the S and P stock exchange X, and it compares and contrasts just have a look at how over a 15 year window. How the firms of Endymion perform against the other two categories.
It's and it's, there's, it's sort of American and it's biased, but they do look at international companies as well. So there's an international index and that compared with a good to great index compared to the S and P over a 15 year, window's fascinating. That'd be it's, you know, it takes a minute to Google it and just scroll down and have a look.
And you'll see that actually strategically, if you get your act together what's possible. Yeah, brilliant. Really enjoyed it. So they Douglas, thank
Douglas Aitken: [00:41:52] you very much. Thank you,Paul Shrimpling: [00:42:01] Douglas. And I have just talked about the core elements of strategy in overview. Really what you can now do is dive into the series, the HCCA series on strategy, which cover each of those core elements in more detail. Actually in discussion with accountancy firms who are either on the path to install in those elements of strategy or have already put them into place, go to the show notes for this podcast and click the link to get access to the full series on strategy for accountants, you can also sign up to be notified each time a new podcast is made available.
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