The cost of drinking the Kool-Aid

Kool-Aid

Now with tax season winding down, I finally have some time to reflect and write about recent events and provide my spin on these.

In any corporate environment we all know of those individuals who have attained their positions either by

  1. Selectively being drafted from upper management for their sympathetic views
  2. Taking shortcuts to achieve short-term results, neglecting long-term consequences

The first type of promotion is what’s known as Empire Building. This comes about when senior management wants individuals around them willing to “go along” with their direction and corporate outlook on how to best serve the interests of the company. Interests of the company in Empire Building more often than not will miraculously coincide with Senior Management’s own self interests. These interests can take the form of Bonus’, Stock Options, Board Positions, Fringe Benefits and Gold Plated Pensions. The least amount of resistance that they can have while attaining these interests the better.

The second type closely mirrors the first, but is distinguished only by the individualistic approach to the end result. WIIFM (what’s in it for me) Managers see employees and subordinates as tools and assets to employ in attaining the quickest, most cost effective, and most personally rewarding path to success. They often do not take into account longer term issues such as quality, impact on brand, societal impact and human cost of their decisions.

Many out there would see nothing wrong with either approach and tout that it is often necessary to employ these tactics to achieve the results the market expects. “Market Expectations” is another name for a Giant pitcher of Kool-Aid. Once we drink from the Kool-Aid pitcher as an organization we start to rationalize the decisions we make to make the market happy. Trouble is, this can’t and won’t last forever. What’s often left in the wake of pandering to the market and drinking the Kool-Aid, is broken trust, lost resources and damaged lives.

As owners and managers, we have a fiduciary and moral duty to think long-term on how to best achieve sustainable and realistic results that elevate our companies and staff as a whole. It’s not a 100-yard dash, it’s a marathon. Play to finish.

Some recent examples of “Kool-Aid” corporations:

Volkswagen takes $18 billion hit over emissions scandal Friday, April 22, 2016 02:03 PM EDT Toronto Sun

Mitsubishi Motors mileage scandal widens, U.S. regulator seeks information TOKYO 
— Reuters

General Motors will pay $900 million to settle criminal charges related to its flawed ignition switch that has been tied to at least 124 deaths. CNN Money

Till next time.

Rick Barbosa

 

 

Getting up from “Under the Bus”

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Recently, although it has happened to me before, I let my guard down and confided in someone whom I though I could trust (in a business sense). This information (not proprietary or classified)  was meant as an aid to improve performance prior to any real actions being taken. I was under the impression that the party in question wanted to understand what others where thinking so they could make preemptive corrections, thereby avoiding any confrontations.

It didn’t turn out that way. Instead the party in question confronted the accusers and followed up with proof by using my name in the process. Blind sided as I was to hear of the incident, I knew I needed to react the right way and learn from this mistake. I owned my error and proceeded to acknowledge the issue with those affected. I can’t expect the same level of trust from the group, nor would I give it if I had been betrayed. Wounds will heel, but going after the person who betrayed my trust would just make two wrongs.

When you are in the middle of a situation like I was, how you respond and own it says a lot about your character. I hope to regain this groups trust over time, but I know that individual responsibility and accountability are the hallmarks of my practice. What we do after we screw up is just as important as learning from the screw up.  All of us at times fall prey to this type of betrayal. It’s how we learn to cope with it that sets leaders apart from the rest. We must hold ourselves to the same if not higher standards, as those we manage and consult, otherwise we risk hypocrisy.

Dusting myself off,

Rick Barbosa

 

 

How not to handle an IT issue-Royal Bank Cheque-Pro

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I have been a Royal Bank customer for decades, and I refer quite a bit of business their way from many of my clients. Usually they are on top of both technical and financial matters when it comes to serving their most profitable business segment (retail banking) until now. Take the recent facelift of their on-line banking makeover. It wastes a lot of space and makes me do twice the work to find out what I need to know. The old format was compact, easy to navigate and work with. The new interface in my opinion just plain sucks. Interestingly enough, Direct Investment and Business Banking has not changed, thank God for small miracles.  When I called in to complain the person at the call center said that Royal had used focus groups and surveys to mold their new design. I responded in kind “were the focus groups made up of hand-picked individuals or actual high volume users?” The rep responded that they would pass my thoughts along and also said that they were fielding a lot of similar calls.

This brings me to their latest blunder. Like many I liked the idea of depositing cheques remotely and avoiding driving to the branch. It would fund the account immediately and save time and money. The math was simple enough. I introduced it to many of my clients, some of which had to invest in scanners. About one month into their roll out the system was shut down. The only explanation I got was that they were having problems with an update.  It’s going on 3 weeks of down time and no update from Royal, despite still promoting Cheque-Pro on their site. All users get is this message:

cheque pro 2

As Canada’s Biggest Bank I would have expected more. Heads should roll and compensation needs to be addressed as well as doing the obvious and quit promoting a product that doesn’t work.

This is why competition from the Fintech industry is so important. Leaner, meaner and hungrier startups need to come in to save the day.

Royal, get your act together and get this fixed, or some Fintech company will fix it for you.

Till next time,

Rick

 

Respecting your Clients and Learning from them

Art

One of the great things about serving a variety of customers is that you get to learn about each new business and industry from the inside. Our sweet spot has, and always will be, the small enterprise. Many of these enterprises start out because driven and talented people often need to be their own boss. They need the creative freedom of the non-corporate environment to flourish and innovate. Many of these individuals are involved in “fringe” industries that many practices shy away from, such as:

  • Tattoo parlours
  • Massage establishments
  • Adult shops, and the industry
  • Night Clubs

Our stance is that as long as it’s legal, everyone deserves a Great accountant. We respect each of our client’s and cater to their individual requirements including:

  • Odd schedules
  • Privacy
  • Location etiquette

The reward is that we often learn more from the client than we teach them. Keeping an open mind and overlaying the business element has made for some great success stories.

History has shown that once our clients embrace the documentation and process controls needed to measure and run their businesses, they feel confident enough to undertake growing their business rather than just working in it.

Till next time…

 

Rick

 

 

Why I’m pulling the plug on Social Media advertising

Referrals

 

Like any other business I have to balance the need for attracting new clients with our ability to service existing ones. I don’t like to overextend my resources to sacrifice service to long-standing clients. During the past year I actively pursued adding 2-3 more clients and possibly adding staff to handle them. You may ask yourself only 2 or 3? The reason for such a conservative goal is that each client is different and can  eat up a lot of support time either on the phone or in person. I like to over deliver and under promise to keep satisfaction levels high. Besides tax season, the past 10 years has seen a new client added about every 18 months, and I’m ok with that. Most of these add-ons were from tax work that progressed into part-time accounts and some even full-time.

Fast forward to 2015. I started advertising on Twitter, Bing, and Google with a modest yet effective budget designed to deliver new leads. What I experienced from SEO, Display and Search ads was a lot of noise and window shopping.  The new clients that I did add were from the QuickBooks Partner program which is free and another referral which was from some previous tax work done in the past. So taking my own example and data into consideration, I’ve decided to end my experiment. All the time and effort I put into designing ads, managing different platforms, choosing keywords and ad text, can now be spent on my current clientele. I’ll probably wind up spending more time with my family and get  more referrals as a result.

Bottom line is don’t believe the hype. Be your own judge and make sure the cost/benefit is in your favour, not Google’s, Instagram’s, Twitter’s or Facebook’s.

Likes are not sales nor leads.

‘Till next time

Rick

 

 

Small Business Excellence: Confidence

Self-Confidence

First and foremost I would like to apologize for not posting more frequently. I have recently been involved with getting a new client up to date with their record keeping and it’s taken most of my free time. I always personally handle new clients so that I understand their business before I hand it off to junior staff. If you’ve read my prior posts I lament about getting an accountant early on and getting things in order instead of catching up.

I digress.

Many of you already know this, but to start and have your own business takes guts and a lot of B***s. I’ll substitute B***s with the word Confidence going forward. Taking that leap and putting your money in harm’s way on a daily basis is not for the faint of heart. Normally individuals with this kind of appetite for risk have an abundance of confidence in their abilities and desire to follow through on their business plans.

This is an absolutely essential quality to have and must be in place to facilitate sales, cash flow, and operations. These 3 key areas will need guidance, coaching and vision to sustain the initial business and see it through its inaugural year.  Most small business owners and entrepreneurs can sustain their optimism through this start-up phase, but when things start to get serious (either in a good way or bad) is when you need that confidence to stick around even more.  Having the ability to stick it out through growth spurts, cash crunches and competition means turning that confidence into persistence. Your staff, partners and bankers will all look to you to see them through these challenges.

No one said you had to do it alone. Confidence and indeed persistence, can come from many sources. Knowing you have help and options when these challenges arise feeds your confidence and enables you to push through roadblocks to come out the other side. That’s why choosing your partners and advisors wisely can help you formulate options you thought you never had. Knowledge is Power.  Power is Confidence.

‘Till next time.

Rick

 

 

 

 

What are the signs you need a new Accountant?

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Accountants like other professionals are subject to regulations and ethical behaviour when practicing. But what separates “average accountants” from “Great Accountants”? Surprisingly it’s not the level of their education or which firm they work for, but it’s how they relate to you, their client.

A Great Accountant will bring the following elements to the table:

  1. Trust (without it there is nothing else!)
  2. Establish Goals and Timelines
  3. Straightforward advice
  4. Timely and on-going communication
  5. Progress reviews and client feedback
  6. Updates on pending changes to the Tax Act or Legislation
  7. Market trends
  8. Competitive research
  9. Proactive opportunities for growth or expansion
  10. Estate or Succession planning

If your not getting what you bargained for then it maybe time to start looking for another firm or person that can offer you more than just “doing the books”.

 

‘Till Next Time

Rick Barbosa