Discipline makes Daring possible.

Musings from The Disappearing Boss on People, Process and Responsible Autonomy for small-business employers.

Category: Accounting

Rocks in the road
April 26, 2019

Rocks in the road

When a big change comes along, imposed from outside, we tend to view it as a problem. A rock thrown in our path – unnecessarily, we think.

But its possible to view it as a welcome opportunity, a chance to pause on the road and reflect on what we’re doing, why we are doing it and who for.

If I was an accountant, now that the first part of MTD is out of the way, I’d be asking myself:

  • What is the job of an accountant?

  • Who can I best serve?

  • What do they really want?

  • How does MTD and its ramifications help me put the answers to these questions in place?

That rock might just be a signpost to a better path.

Reporting
April 24, 2019

Reporting

Nobody likes reporting. It gets in the way of doing the job.

Because it feels like an extra task, it gets pushed back to the last minute, and possibly even made up. Worse, it can be very tempting to request more information in a report, because ‘they’re reporting anyway’.

On the other hand, feedback is essential if a business is to thrive and evolve.

So how best to get feedback you can rely on?

Firstly, keep it simple. What is the least you need to know whether are not things are going well?

Secondly, make collecting that information a side-effect of doing the job. The trick here is to find a step in your process that creates its own trail. A step that either gives you the data you need or can act as a proxy for it. If that’s not possible, sample instead of monitoring continuously.

Of course, reporting as we know it only happens because the person doing the job is not the person making decisions about how best to do the job.

That’s where the real problem lies, and the solution to that is responsible autonomy.

Measuring what matters
April 23, 2019

Measuring what matters

Years ago, on my way to work, I’d call in to the Benjy’s sandwich bar next to Cannon Street Station to pick up breakfast. It was always full of other City workers doing the same thing.

In those days, the hot sandwiches and toast were freshly made, and there were only 2 kinds of coffee – with or without milk. You ordered at the counter, waited for your food, and paid at the till.

So far, the same as every other Benjy’s.

But here’s where it changed, because the manager of this Benjy’s had a system.

He took your hot food order, shouted it to the team in the kitchen behind him, wrote it on a paper bag and stacked that bag on top of the one before. That was it. You mooched around the shop (picking up an extra snack or two), until he called out your order. You picked it up along with a tea or coffee from the ready-made batch at the counter, then paid at lightning speed at the till.

The wait for food was never that long – he had clearly parallelised that, so that bacon, eggs and baguettes were always ready, and the stock of teas and coffees was constantly topped up, at least during the busiest times of breakfast and lunch.

All in all it probably took less time to happen than it’s taken me to write down.

What this manager had realised was that what mattered to his clients was not the wait for hot food, it was the wait to place an order. So he built his system around minimising that.

Once you saw that paper bag go down, you knew you were taken care of and could relax. Once you knew your order was in, you weren’t going to walk out without it. In fact you were likely to spend more, to fill in time while you waited.

I never visited another Benjy’s that worked like this one.

I’m guessing that central management assumed that the volume of business this manager handled was simply down to being next to a busy commuter railway station, so never thought to come and look at how he did it, so they could pass that system on to other franchisees.

I don’t know what they were measuring, but it wasn’t what mattered. Which may be why the chain failed.

Wasted effort
April 17, 2019

Wasted effort

It’s easy to get very excited about increasing efficiency through digitalisation, automation and AI.

But in the excitement we can forget that by ‘increasing efficiency’ what we are really trying to do is reduce ‘waste’, or to put it better, ‘wasted effort’.

In Lean, ‘wasted effort’ falls under 3 categories:

  1. ‘Mura’ or wasted effort due to variation
  2. ‘Muri’ or wasted effort due to overburdening or stressing the people, equipment or system.
  3. ‘Muda’ also known as the “seven forms of wasted effort”

Muri seems like the kind of wasted effort we should always try to eliminate (and interestingly, is the least talked about).

Otherwise, what makes effort wasted?

Quite simply that the customer is not willing to pay for it.

This seems blindingly obvious. Less obvious is the necessary implication – that if a customer is willing to pay for effort, it is not wasted.

So if a certain type of customer is happy to pay extra to be treated differently, this is not Mura. If a customer is willing to pay to have their papers picked up in person, this is not Muda.

The customer’s perception of value is your source of profit. Don’t throw it out with the bathwater.

Overhead
March 25, 2019

Overhead

When you add a manager to a business, you add overhead. So the first effect of hiring someone to replace yourself as manager or supervisor – so you can work on your business instead of in it – is to take a real hit in profitability.

What if, instead of appointing someone new to manage your people, you appointed them to manage themselves? You could use the saving in overhead to invest in them instead, building a supporting framework, coaching, mentoring, training, and of course a fair share of the rewards.

When you want to expand to serve more customers or clients, you can simply add more people.

Those who’ve taken this approach have found the return on this kind of investment to be well worth it.

Compliance
March 13, 2019

Compliance

The need to satisfy a regulator, or meet legally binding deadlines creates a difficult balancing act for professional service firms.

The regulator’s process is easy to see, so it is much easier to build a business around satisfying their requirements. Effectively the firm becomes not much more than an interface, taking information from a widely disparate set of clients and reshaping it to meet a required format.

One danger is that if every firm looks like this, prospects are going to buy on price.

Another is that once compliance can be automated or outsourced, the firm’s purpose effectively disappears.

Now might be a good time to start re-framing.

“People will always need [insert ancient profession here]”
January 16, 2019

“People will always need [insert ancient profession here]”

Being in an industry that’s driven by compliance seems like a safe option.

But when the compliance part can be automated, outsourced or down-skilled (and it will be the compliance part that goes first), you have to offer more if you want to stay in profitable business.

There will be many incumbents who decide to step out when this happens.

That’s a great opportunity for those who want to step up.

Professionals
January 15, 2019

Professionals

“A critical characteristic of a profession is the need to cultivate and exercise professional discretion – that is, the ability to make case by case judgements that cannot be determined by an absolute rule or instruction” [*]

So, how do you get professionals to do things the right way?

Not by expecting them to work like fast-food operatives, or a production line.

First, work with them to build a shared vision of what ‘the right way’ means for your clients – what I call your Promise of Value.

Then create a supporting framework of high-level, end to end business processes that operates at the right level of abstraction – delivering guidance rather than absolute rule. Something like a professional musician’s score, that tells them what to play, but not how.

The two things together make a powerful combination that encourages consistency, yet leaves plenty of room for judgement on the exceptions, plus plenty of scope to evolve the system in the light of experience.

In other words, you’ll free your people up to be professional.