The team at Sage Accounting Solutions came up with six challenges that they hear often from professionals as to why they can’t go to value-based pricing.
Fortunately I’m up to the challenge. Enjoy!
The team at Sage Accounting Solutions came up with six challenges that they hear often from professionals as to why they can’t go to value-based pricing.
Fortunately I’m up to the challenge. Enjoy!
I stood silently among a group of a dozen managing partners of regional firms as I hooked up my MacBook to the projector to begin my talk about becoming a firm of the future.
They had just been presented a state-of-the-profession address by an MP of a Top 100 firm. I have heard much of the content of the presentation before at other gatherings of professional accountants.
The litany of “challenges” repeated the narrative that has been well documented and continues to grow for over the last decade:
After my presentation was successfully displaying on the projector – the modern equivalent of the campfire in this narrative. I paused to get their full attention.
“Here is what I heard,” I began.
“Our profession is sick, even dying. We might have cancer. We really don’t know, but it is bad.”
After another pause and with no one disputing my summary, I continued, “I think you are right. I think you do have cancer. The good news is, I believe I know the cause and it is curable.”
They all looked at me in hopeful, but suspect anticipation.
“Your cancer is called ‘a timesheet’ and you must cut it out completely before it kills you.”
There were a few barely perceptible nods and even some smiles and hushed chuckles from the two “younger” people in the room. The chuckles quickly morphed into coughs as they remembered their MP was seated among them.
I proceeded to dismantle all the arguments (there are only four) in favor of the timesheet before anyone else could say anything. I even went so far as to do something I rarely do in a public live event. In fact, I call it the nuclear option.
The brief exercise is so stinging, so devastating to the timesheet argument that I fear that it could cause emotional damage to everyone in the room. Because of this I usually reserve it for online anonymous events so that folks have some time to themselves to recover.
“How many of you have ever filled out a timesheet?” I boomed as I raised my hand in the air. All hands joined mine in pointing heavenward.
“How many of you have put down on your timesheet the incorrect number of hours you worked on something, be that too many hours or too few hours with full knowledge that it was incorrect?” As is the case everywhere I have done this exercise, all hands remained with mine in the air. One participant, I do not know who, meekly mumbled, “Every week,” under his breath but audible to all.
I paused again, then quipped softly, my hand still in the air, “The ethics session begins later today,” trying to make a bit of joke to relieve their inner guilt.
Why is this? Why, in one of the most ethical and honored of professions, is this not only the norm, but ubiquitous? Why are these good people, moral and upright members of the community, whose commission is, in part, to identify, correct, and in some cases, prosecute financial wrongdoing (aka, getting the numbers right) sitting before me all guilty of that same crime?
The answer, again, is the timesheet.
In my session on Trashing the Timesheet, I speak mostly of how the timesheet is suboptimal as a pricing mechanism. There is no doubt about this, it is beyond dispute. However, my argument goes beyond this mere deficiency in pricing. The timesheet, not the people who fill them out, is immoral and unethical.
Why? Because it – the idea of a timesheet – is based on a falsified idea known as the labor theory of value which was developed in part by Karl Marx. Time/value equivalency is a false notion that causes bad things to happen. As explained by my “nuclear” exercise, it is the timesheet causes otherwise moral people to do immoral things; it is the timesheet causes people in a highly ethical profession to do unethical things.
I realize this is a dramatic statement, but it is nonetheless true. Think about it no one has ever said they have behaved completely honestly. In addition to this reason, my distain for the timesheet and belief it is immoral expands when it is applied inside the organization to judge individuals.
People come to believe that their worth is actually in their hours they “bill.” They start to believe their hours have a specific “worth” not only to the firm but to them as if hours “spent” with children or aging parents must be evaluated against the hours “spent” at work.
Country singer Jamey Johnson recorded a great song a few years back entitled The Dollar. In the video for the song, scenes cut back and forth between a little boy and his father. When the boy asks his mother, “Why does Daddy go to work?” the mom replies, “Your Daddy’s got a job, and when he goes to work they pay him for his time.” The child then goes to his piggy bank and returns to his mom and in the chorus of the song asks:
How much time with this buy me?
Is it enough to take me camping in a tent down by the stream?
If I’m a little short, then how much more does Daddy need,
To spend some time with me?
It is my contention that this song illustrates what happens to people who record their time. Over years indeed decades it affects their internal belief system about who they are in essence as people. It robs them of their humanity. This is evil and it must be destroyed.
It is time the profession rid itself of this meddlesome method of malevolence.
I am honored to have a chapter in this new free eBook. Here is more from the press release:
Entrepreneurs starting their own businesses now have a little more help. Start with a Profit: Best-Practice Tips for New Entrepreneurs from Top Accounting Industry Leaders is the latest guide to helping new business owners become successful.
Editor Sandi Leyva, CPA, asked fellow accounting industry thought leaders one question: “For someone who wants to start a new business from scratch today, what is the most important strategy or tactic you’d tell them about to help them succeed?” One dozen thought leaders along with Sandi provided their answers. Co-authors include:
- Alison Ball, Senior Manager of the Global Influencer Program of Intuit, Inc.
- Sharada Bhansali, Co-Founder of AccountantsWorld
- Randy Johnston, CEO of Network Management Group, Inc.
- Ed Kless, Senior Director of Partner Development and Strategy of Sage
- Sandi Leyva, Founder of Accountant’s Accelerator
- Monika Miles, President of Miles Consulting Group, Inc.
- Clayton Oates, Chief Solutions Officer of QA Business Pty Ltd.
- Edi Osborne, CEO of MentorPlus
- Leslie Shiner, Owner of the ShinerGroup
- Doug Sleeter, Founder of the Sleeter Group
- Sandra Wiley, COO and Shareholder of Boomer Consulting
- Geni Whitehouse, Countess of Communication of Even a Nerd Can Be Heard
- Scott Zarret, President of CPA Academy
“To my knowledge, it’s the first collaborative work of thought leaders in the accounting industry,” says Sandi Leyva. This is Sandi’s 30th book and her first collaboration as editor.
Although each author’s contribution is quite unique, a few client-centric themes emerged, including how to market most effectively, how to build customer relationships, and how to interact with clients. Others focused on business models and pricing. Still others urged the entrepreneur to embrace their passion and their “why.”
Last weekend, I gave myself a “honey-do” list item to solve a problem that was making me crazy.
In between our “formal” living space and our family room are two closets. One contains gift wrap, candles, out-of-season tchotchkes and the like. The other is a very narrow but deep closet that contains mostly toys and games that the kids play with. (Actually, they seldom play with them, and instead watch somebody called Stampy Longnose on their iPads, but that is another post.)
The kids do access this closet daily and I have already rigged up a motion sensing light inside the clost which remains on until no motion is detected for more than five minutes. The problem is the kids kept leaving the door open which a) impedes the hallway outside the closet, b) looks terrible, c) allows motion outside the closet to trip the motion sensor thereby illuminating the light, and d) makes me crazy to see a door open.
A few weeks ago, I had a brilliant flash of a solution – an autoclosing door hinge. I knew these existed, but I did not really know what might be involved in installing one. Fortunately, they are relatively cheap and only involve replacing one of the current hinges.
I went to Home Depot and found the hinge. Here is a photo:
You can see the cylinder in the middle a a bit larger than a regular hinge, but other than that it is normal looking.
What caught my eye however was the warning label.
You can see that according to the State of California I need to be concerned because, “this product contains chemicals known… to cause cancer and birth defects or other reproductive harm.”
Seriously, I ask you what would I possibly have to do with this door hinge in order to get cancer from it? Breathe near it? For how long? Lick it? Eat it?
I have to believe that many of the things I could come up with to do with the hinge would cause physical problems much quicker than the development of cancer.
Think about the expense that went into this company having to change their packaging and print this label on this product. It is beyond absurd.
Thanks California! I feel so much safer.
I am sure many of you will regard this as odd and perhaps I will get a few unsubscribes. So be it.
What follows is the text of the eulogy delivered by my Uncle Richard Kless at my father’s funeral earlier this week.
Thank the Lord for Marriott stationary. For those of you who don’t know me, I am Frank’s little brother, Richard, and this is the third time I’m doing this for one of my siblings. You know, they talk about sibling rivalry, how they always pick on the little guy? You got him, right here; Thanks to my brother. It was my brother Frank that suggested that perhaps I should say some remarks when my mom passed away, and I didn’t know it was going to turn into an industry.
Father, please forgive us for laughing in the sanctuary, and I want to thank you for a beautiful liturgy, and a wonderful mass. You saw enough of my brother in the gospel readings, so I’ll try to give some reflection too. Frank was the oldest of both sides of my family, in terms of cousins, the oldest of my three siblings, he had a lot of roles, so as Father mentioned, he was a great teacher. He did a lot of things, and I was reflecting so much that I can stand up here forever, when I thought of the many roles that he had.
When you have 10 years between your oldest sibling and yourself, there’s this ten year lapse of the little intimate snapshots. It’s not so much a video, but it’s these little pictures in my mind, and Skip was always the big guy in my life. He didn’t speak much, as a lot of you know. He wasn’t the easiest guy to communicate with. You’d wait that half hour for the, “Yes.” But I think of the many roles that he played: Big brother, oldest cousin on both sides of my family, my mother’s side and my dad’s side, and he was looked up to. He was this quiet guy.
I got an email from a good friend of mine, who was actually writing to my sons, talking about their uncle, and he said, “Your brother, your uncle Frank was always a kind and considerate man,” and that’s how we knew him. I think of the roles that he played as the oldest sibling, the oldest cousin, and then, as he went through life, I remember him deeply, and I was thinking about the first real memory I have of Frank.
He took me for a bike ride around the block in Brooklyn, New York, and if you knew, growing up in Brooklyn, New York, your street was the world. And when he took me around the block, wow. That just opened up my horizons. And I remember him as the oldest sibling — my mother would drag me along, my brother was in a play — through high school years and all that. I look at these roles, and he fulfilled each one that he had, and not only as a sibling, where I think his quiet demeanor spoke much more than the words he could ever say. As he went through life, he became a boyfriend to a girl who only lived a block and a half away, and they met in the first grade. They went through grammar school together, and when they went to a wedding, he caught the garter, and she caught the bouquet, and the greatest role that he played was as a husband.
And then, he was asked to do some more: play the role of dad, and it was awesome to see him as a dad.
I, again, as the youngest, always had the great, nice way of going out and spoiling my nephews, and nieces and would just go back to college, and leave them all in disarray, to annoy Frank. But he was a husband, and a dad, and the role he played as grandfather was his finest that he would play, through 11 grandchildren. In all those roles that Skip played — I can call him Skip. That’s all I ever knew him– I think I only called him Frank, like twice in my life. I really mean that. To me, he was Skip, and the inspiration that he gave to us.
Some people say, “You know, it’s tough to get to know your brother. He doesn’t say much.” And look at his whole entire life. His life was speaking volumes. You have these poignant moments when someone dies, and the other day, when we went in to the funeral home — and Paul want to thank you too on behalf of the family; you’ve been a great godsend to us — Peggy started lying to her children and me. She started saying, “I am sorry I am not strong.” And Eddie said, “Ma, the last six years say otherwise.”
And I think of Skip’s last six years, the suffering that he went through. Never once would Frank complain. I remember talking to him, saying, “Why are you watching the food channel? You can’t eat it. Why are you doing this?” But he loved cooking, and it was almost–he could watch the food channel, and taste what they were doing, and he was okay with that. And I was like, “You’re sick. What’re you doing?”
But to know Skip, Frank, you have to know his faith. He was a deeply devoted Christian, Catholic man. Father alluded to that. And he was really proud of me when I was going for my masters in theology, and I think that’s the one thing, that he was always proud of other people’s achievements. When he was coaching in high school, he coached three national champion hurdlers and sprinters at Mt. Vernon High School. He only coached for five years, but he did his best.
He read up on coaching techniques, he talked to a lot of people. I know he became very good, close friends with my high school coach, and they just couldn’t believe where he got these talents from. It had to do with his great mind. He loved to read, but we know, he loved to direct too, and he taught so much.
But it’s in his quiet faith, his quiet and unassuming faith, that I would say that you would really have to know the depth of my brother. We once discussed, I remember this a few years ago. It was after he had a stroke, and he could not eat anymore. And he once asked me what my favorite scripture passage was. And I said, “Well, that’s kind of too difficult.” I have a couple of favorite ones, and one that we used in the gospel tonight is one of my favorite. But I said, “I think it’s the one in Mark’s gospel, that it’s the shortest prayer that I ever heard, but it’s the most honest prayer.” I want my relatives to know this, and Skip’s friends to know this, and I told him.
I said, it is, “Lord, I believe, but help my unbelief.” And I got talking to him about that, and he said, “That’s pretty honest, right?” You don’t believe, but you believe, and you kind of want to believe some more. And I know after a stroke, this is very ironic, you know, Kathleen passed, Jimmy had passed, and it was just he and I. Peggy told me the other night, “There’s no more bookends.” He would often say we were the two twins separated by ten years. But getting back to this mention of faith, I know that there’s some of you who don’t believe in God. I know that you’re here out of respect, but I would also say, if you want to know my brother Frank, you’d have to know the depth of his belief in the Lord Jesus. Often times, we are asked, what is it about death? We are the Kless family, so we are the family that puts fun in the word funeral because we do it so well. And again, I mean no disrespect, but I would say part of that fun, is your faith.
It’s that little seed in all of us. That says, “I believe, help my unbelief,” because Jesus honors that. In the face of death, in the face of loss that we all have, I’ve looked for it. I know other people have looked for it. And there’s only one person that has an answer for this, and that’s Jesus. And my brother knew that so well. Frank knew it so well.
Jesus hated death, and death is not the natural order of things. It’s life everlasting, it’s the love that we have for one another. It’s the love that mocks death, as Jesus would, and says come into the kingdom. The last vision I have of my brother Frank, is sitting up at the Father’s banquet, and boy, enjoying those ribs, and everything else he saw on the Food Channel. He had a beautiful understanding that men and women are the crown of God’s creation, and as great as this universe is, as great as this creation is, God loves us beyond the grave. God does not allow this to be the final word.
That was Frank. He lived it. He did not have to say too much about it. He was a kind and considerate man. As the scriptures told us, we honor him. He honored us in his life, his quiet life that he led by example. For this, we are all grateful. Thank you.
And here is the audio.
This weekend I received a message from an attendee of one of my early Sage Consulting Academy classes. He has recently started his own company and wrote to ask that he be included on Ed’s List.
Here is the message:
I’d be honored if you add my software consulting and development firm, Monkeys Amok Software Consulting, to Ed’s List. Your conversations on fixed-price engagements and service guarantees still ring in my ears from when I first heard you speak at the Sage Consulting Academy years ago.
When I started my own company a few months ago, two things were obvious. For one, I’ve never had the illusion that hours spent has any relationship to the value I deliver to a customer; hence, I have no interest in doing time-based billing. Secondly, I expect my customers to hold me accountable so, of course, I offer an unconditional money-back guarantee on my services.
These things should be common sense, right? Keep the posts coming!
All the best,
I am thrilled to add Chris and Monkeys Amok to Ed’s List. Welcome!
If you are aware of any other organizations that meet the criteria, please let me know.
Today, I had the honor and pleasure of participating in a Twitter chat sponsored by my employer Sage. (Honestly, sometimes I think, wow, I get paid for doing this, really‽)
My thanks to the entire team at Sage but especially Mark Redstrom who made this incredibly fun and easy. Thanks also to all who participated in the fast paced banter in 140 characters or fewer.
Below is the “Storified” chat session.
While I was deeply saddened to hear about the passing of Mets (well, and Yankees) legend Yogi Berra this morning. I felt compelled to share a conversation had on my Facebook page during which Yogi gave us one last chuckle.
One commenter suggested that Yogi was the “Arnold Palmer of baseball” to which I responded that we needed to create a drink in honor of him. I came up with the following:
My plan is to order one at a restaurant in the near future. Here is how I envision the conversation:
Me: I have a Yogi Berra.
Server: Never heard of that sir. What is in it?
Me: Easy it is half club soda, half seltzer and half carbonated water.
Server: Okay… Wait… what?
As a youth I proudly wore number 8 in honor of him. He was the manager of the Mets at the time.
Yogi is truly a hero of mine. Not only is he the only person I can think of who bridges the Met-Yankee divide, but his legendary reformulations of quotations are always inspirational.
When speaking I often refer to him as “that great American philosopher, Yogi Berra.” In my book he is up there with Walt Whitman, Mark Twain and Will Rogers.
My personal favorite quote: We made too many wrong mistakes.
Much wisdom in that.
RIP, Lawrence Peter “Yogi” Berra (May 12, 1925 – September 22, 2015)
Yesterday, a former colleage of mine sent me this piece by Jim McGinnis of Intuit. In the interest of full disclosure, and as many of you already know, I work for a competitor of Intuit’s, Sage. Please note this is not about me slamming a competitor from a product standpoint, but rather I am calling out errors in Mr. McGinnis’ thinking. I have never met him and I am sure he is an affable fellow.
This is not an attack on him, but the ideas presented (or lack thereof) in the post.
Mr. McGinnis proposes a three step process to becoming a “Firm of the Future.”
Needless to say, I find this listicle a bit, err, lacking.
For example, the first sentence of the first paragraph of his first step is:
In the cloud, you can meet client expectations, stay relevant through improved efficiency, achieve greater collaboration, realize more time savings and lower your costs.
Oh where to begin.
Let me offer a listicle of my own as a critique. I shall entitle it Five Ways This Sentence Completely Misses What Being a Firm of the Future Really Is About. (I know, my headlines suck.)
And that is just the first sentence of the first step. Other errors:
I got more, it is an entire two day class.
At Sage Summit 2015, I had the honor of being interviewed by Bob McAdam, Todd McDaniel, and Darcy Boerio, hosts of the Enterprise Software Podcast. They “talk all things enterprise software a couple of time each month.”
Specifically, they wanted me to talk about value pricing, but the conversation ranges from hanging out at the Mint Lounge (now known as the Spirits Lounge – see photo below) in the Holiday Inn in Fargo, ND to the best pizza place in Allen, TX.
You can tell by listening that I was pretty amped up on adrenaline from being at Sage Summit. In fact, I blathered on so long they had to break it up into two episodes. That said, I think I did a pretty good job of sharing some of the basics of value pricing including why timesheets need to be trashed, the need to “move off the solution,” and how to work through Mahan Khalsa’s Five Golden Questions in order to extract the understanding of the value to the customer.
Have a list to both right here: