The Modern CPA Success Show: Episode 16

We all have our own knowledge and experience, but it’s important to also learn from other people’s ideas, which is why we are sitting down with Jody Grunden and Adam Hale, COO at Summit CPA to talk about the best books you can read to become a better CFO.

Listen to learn about our favorite books and how they have inspired us as professionals.

Jamie Nau: Hello, everyone and welcome to today's podcast. Today you have Jamie, Jodi and Adam from Summit CPA, and we're going to talk about some of our favorite books that have made us better CFOs. This is one of my favorite things about working at Summit. We all have our own knowledge, we all have our own experiences. but one of the things we really emphasize is using other people's experience, and that's that comes from reading books. Every book we read helps us be a better CFO. So we're going to dive into three of our favorites. This will be a podcast we will do again in the future, because there's so many good books out there. But today, we're going to start with three. So the first one we're going to start with is kind of the baseline of what started Summit, and that's E Myth. So Jody why don’t you dive into that a little bit, and how you used E Myth when starting Summit, and how it has helped you be a better CFO.

Jody Grunden: Yeah, for sure. With E Myth Revisited by Michael Gerber, he did a great job of breaking down what you need to do to be able to scale your business, and develop processes in order to be repeatable. That was the main thing that I got from that book. And what I mean by that is when you walk into a Burger King restaurant, or a McDonald's, or something like that, you're going to see the same exact floor plan, or same counters where you pick up your food in the same place. They introduce everything the same way, and with that, it becomes a repeatable process. So why can't you bring that to the accounting world? A lot of times we double our processes, not only there, but we greet people differently, we act differently. We do things real different from person to person, and the biggest thing I got out of that really was the process itself. How can we make this so that I, Jody Grunden, am not going to be the accountant that is working a bazillion hours every year because I'm doing tax returns until, 10:00, 11:00 at night. You know, I've been working for over 30 years now, I want to be the person that actually develops a process for somebody else that could fit into my shows, where I can actually manage that business, and that's really how we actually developed Summit. We started empowering people through process management. Actually, the other thing I did offer is a kind of identify the types of person, our types of people that actually fit the mold for growth. You know, those that are entrepreneurs, I think he breaks it out between three different individuals, the entrepreneur, the manager and the technician, entrepreneur being someone's always looking in the future, which I feel like I do at a time. The manager kind of lives in the past and manages as well, and the technician becomes kind of the doer. And so a lot of times with that, when I see a lot of people that think they're the entrepreneur, and they pop into that entrepreneur role, and then they settle back in to maybe the manager role, or a technician role end up being a doer because that's what they really enjoy. And so it's important, I think, to have the right people in the right places within the organization. You know, those that are future thinking, those that are in the present, and then those that are in the past, you know, those are the three different individuals that he identified. We really look to hire the right people for the right positions within our company. We've been doing that from day one. So I guess the two big things I would say there is the processes, and then people are the two different areas that I got from that book.

Adam Hale: I was just going to add, from the advisory side of things, that three headed monster that Jody is talking about, I think is important because as he mentioned, when we're working with business owners, it's important to remind them, and I think he articulated it well in his examples, it's important to remind the owner of the company like, hey, which one are you, or which one are you leaning into now? Because it's really it creates a balance, you know, you need a little bit of all these things, and maybe you just naturally can't fit into all three of those, or balance them. But you can use the team around you to help level set between those things. So I think that advisory tip is huge. Then from a scaling perspective, as Jody mentioned, it's not just you know, in CPA firm, I think a lot of us have that E Myth already built in to our tax return process, but I think where we tried to innovate and do more around was not only just the real tactical stuff, like preparing a tax return and then maybe taking that to a bookkeeping level, but also in the advisory world. I mean, I think that's where it gets a little bit different than what you would normally see, because I think most people say, yeah, I do that with my tax return process, or my payroll process for my bookkeeping, doing that in the advisory realm is what's given us the ability to scale the 50 plus people that a lot of other firms struggle with. So having those baseline processes for our CFOs is big.

Jamie Nau: Yeah in my role as the director of accounting, I'm reading math all the time. And to be honest, I have the hotel story, which is, you know, I think a whole chapter pretty much of a E Myth. I have that printed out. I read it once a week because it's that important to me. If you haven't read the hotel story from E Myth you should definitely Google it. There's a couple of screen shots in college manuals, and other places where it just explains that story. But basically he stays at a hotel and he gets the same experience every time. It's always amazing. It's always personalized. Eventually he goes back and asks the managers, how in the world did you do that? And they pull out this giant binder and say, this is how we do it. So it's my job within Summit to create that binder. We had a retreat last year, and talked about that story, and related it to things we do at Summit. Kind of relate as the eyes of the firm, because it is that important to us to make sure that we have those processes in place. That everybody knows what their role is, and they know how to make our clients feel special being in a process as well.

Adam Hale: I think the big key takeaway there is it can be done at the advisory level, not just the doer level.

Jamie Nau: Definitely. So the next book that I'm going to talk about is one of my favorite books, and it goes back to process as well. It’s called Getting Things Done, by David Allen. I know this is definitely more at the personal level, but I think that when you have people coming into an accounting environment, where they're pulled in a lot of different directions, you know, if you're an accountant who as 10 clients, oftentimes you're going to get overwhelmed. If you're a CFO and you have 20 clients, it's even harder to stay organized. So I feel like Getting Things Done is the perfect organization system for an accountant, and for the CFO. It's something that we try to implement with all of our accountants, and walk them through how a process works. How do I stay organized? How do I make sure that I clear my inbox every day? How do I make sure that I'm communicating with clients quickly and timely? Because nothing's worse than waiting a week to communicate back to a client. They're just not going appreciate that. They communication all the time. So we refer to Getting Things Done a lot. We've printed out manuals on how to apply getting things done specifically to Summit because it’s really important at the individual level.

Jody Grunden: So Getting Things Done, can you tell me a little bit more about that? Right now you guys are having your monthly book meeting on, Getting Things Done. How do you incorporate that on a monthly basis with the team? How's that been going?

Jamie Nau: That's a great question. So what we did is we started off by reading the book, and we broke it down into two sections, and the Getting Things Done processes, there's multiple steps to it. So we took each one of those steps and talked about that at first. The big thing with Getting Things Done that I found, was everybody wanted to use a different tool, which I'm fine with, as long as you're implementing the Getting Things Done process. I personally use One Note to keep myself organized. That's where I keep all my notes. I flow my email through One Note. Some people wanted to use Trello. So we spent a lot of time setting up people's processes for getting things done. Then once we got everybody set up, the book meeting kind of became more of an accountability meeting. So what we do is we basically hop into the meeting, and it’s kind of like working out. So if you're telling people you're working out, they will ask how are you doing? How much weight have you lost, or what do you bench? So that's how we handle our getting things done meetings now. We basically hop in there, we ask, what is your inbox at right now? How many emails do you have in your inbox? We break it down and someone says, I'm down to three, or I'm having a rough week I am at 40, and we talk about that first. The second thing we talk about is the weekly review. So part of getting things done is sitting down before the week starts, and looking through your calendar, looking through your to do list and reorganizing it and saying okay, I thought I was going to work on these KPIs this week, but, you know, this other thing came up that's more important, I'm going to move that back to next week. So that's the weekly review. We ask everybody, on a scale from one to three, how are your weekly reviews going? Some are awesome. Some say, I had a great weekly review this week, and some will say it was a rough week for me, I kind of ran out of time. It was a busy week and I didn't have time to do it. Then the last thing we do is we hold people accountable on the daily reviews. So that is just going through clearing up your inbox, or clearing up your calendar every day, spending five minutes on that. So we try to hold each other accountable to the three main parts of Getting Things Done.

Jody Grunden: That's pretty awesome. How about you, Adam? What's your big book?

Adam Hale: The one that I find that I come back to year after year, is the Four Disciplines of Execution, by Chris McChesney and Sean Covey. So I think their website, they because like E Myth do some coaching too, through Franklin Covey I think it thought, but I'm a big fan of the KISS principle. Keep It Simple, Stupid. So I think one is just be so basic in your understanding that it just makes a ton of sense. So I’m always going back to it. Again, as far as like articulating the point, I think they do a really good job of explaining it. So to talk through the four pieces, because this is what we do with all of our clients, as our role as an adviser. First, we determine what they call a WIG, which is Wildly Important Goal. But for the rest of us, we're always just talking about like, hey, what's the one thing that we need to accomplish? It's really easy to get caught up with determining five or ten different things that are important, but what's the one major thing that if we get it done everything else has its way of just kind of working itself out. So that's the first thing, identifying that. Then the next thing is being able to act on those measures. So they talk a lot about lead and lag indicators, which we talk about all the time, because as we were building out a forecast, we're always trying to figure out what those drivers are. Lagging measures is what everybody's used to, its balance sheet, it’s the income statement. That's that result. I think the example that they always talk about is weight loss. So you want to lose weight, so you get on the scale. That's the lag measure. Well, what's the lead measure? You know, how much are you going to work out? How are you going to diet? What are you going to put in your mouth? You know, those kind of things. If I do this every single day, whenever I look at the lag measure, when I get on the scale, I'll lose weight. It's similar in the business world. So whenever you're trying to determine what are the things that we can do that will lead us to a good result, it's all centered around that Wildly Important Goal. So acting on it is the second piece. Then the third part is putting together a scoreboard. We do this with our clients. We put together dashboards. We talk about what those lead indicators are, what those drivers are, and how to report on them. More importantly, what they want you to do is they want you to figure out a way to get the players involved. So the team, you know, the people actually driving those numbers, how are you going to get them involved? Because, you know, I think the analogy they use, again, they kind of go into with more of a sports analogy whenever they're talking through the scoreboard. But the coach might have 10 or 15 different plays that they want to draw up, and they have all these great elaborate schemes, but at the end of the day, the only thing the players need to really see is the actual keeping of the score. As soon as they can see they made a basket, the score goes up. That gets them engaged. So making sure that people are on that same page with the scoreboard is huge. Then I would say the last part, which is again, our role as an adviser, is that cadence of accountability. So we meet with our clients on a weekly basis and we're holding them accountable to all these different things. So making sure that they understand what the importance of them are, and how to get things done, and holding people accountable to them, is a key component of it, and in advisory services.

Jamie Nau: I think the big thing that I took from that that book was oftentimes it's tough for us to develop consultants. Like, everybody is a good accountant, everybody's good at certain steps, but I think what that book does, is it helps you have those consulting conversations. Just asking that one question, what’s your Wildly Important Goal? That can take a lot of different directions with a client, especially a new client during onboarding. You know, you're trying to get a new client, and you're trying to figure out how to forecast, or trying to figure out what they need to look at every month, having that question can lead to an hour long conversation that you'll always remember, and know what is really important to them. Then you can always come back to that point. You can always ask more questions about that point, to help be a consultant, versus just someone who's reporting past numbers. I'm always trying to think of what can I do to make sure they hit that Wildly Important Goal.

Jody Gruden: Yeah, I think a big thing I had was the lead and lag indicators. A lot of times accountants, and we at one point were guilty of this as well, where we come in and say, yeah, Mr. Client, or Miss. Client, you need to get your current ratio to whatever percent, 1.25, whatever that is, and they would look at us and they'd say, okay, that's cool. But when they walked away, they had really no clue what we were talking about, or even how to impact that number. So, you know, that's based on the lag indicator. You know, the lead indicator is maybe you're selling X amount of widgets at this dollar amount for this period of time, or whatever that might be, trying to figure out what that lead indicator was to be able to help them achieve the goal, that Wildly Important Goal that we had to present to the bank, which is that, you know, solid credit ratio, or that sort of thing. That was a big thing for us. Not just to talk about the end results, the formulas and the ratios, again, they have no way to control, or understanding what that means, but actually digging deep, and talking their language, something that they do have an impact or control over.

Adam Hale: Yeah, because they talk about how the success measures the lag, and that's easy, it's easy to measure and that's the reason why we do it. So that measures the success, whereas the lead indicator predicts whether we'll be successful. So yeah, when we talk to our clients, we always dig into their revenue, how they make money, what they're doing, figure out what really drives that nonfinancial, usually thing that they're doing, and then figure out how to bake it into the model. Then we talk to them about their team, the people that are actually doing the work. How can they impact that lead indicator? So then the conversation turns to coaching them into coaching their team. To make sure that if we do this every day, or every week, we're going to have a fun meeting at the end of the month, or we're going to know why we missed, or do we need to adjust the forecast for a new reality? Those kind of things.

Jamie Nau: Yeah, oftentimes, that Wildly Important Goal, or those indicators is what the company is passionate about. So it makes the meetings a lot more valuable to them because they are like sweet, we're going to go talk about something that I'm super interested in, and that I know is important to me, versus…

Adam Hale: …current ratio?

All: Laughing. [in audible]

Jamie Nau: Exactly. How many times do we do that though? How many times do we have clients, where they go, we spend a lot of time talking about this, to be honest it's just not that important. I wish you spent more time talking about something else, which is that Wildly Important Goal.

Adam Hale: We always have to keep our eye on the prize, and just dig deep.

Jamie Nau: So if I'm going to through our email address out there real quick. Again, we're always trying to make this show for our listeners. We want to make sure that we have topics that are relevant to you. So feel free to email us any topics you have, or if you want to be a guest on the show, or any questions you have. The address is: cpa@summitcpa.net. Again, we just talked about three books, we have a little bit of time left here. I kind of wanted to talk with you guys about your reading habits. I know you guys read constantly. So I'm just curious about what kind of tips you have for people to read as much as you do? Because I do think it's really important for our a firm, and part of being a business owner. So, Jody, I'll start with you. Any tips for the listeners?

Jody Grunden: Oh, jeez. Reading is huge. A lot of times what I'll do is, it really depends on my concentration at the moment, because sometimes it's really easy to read things all the time, but it takes some time. So I vary a lot of times between reading and listening. When I hop on an airplane, and I have time to read, I just read. But then I'm in the car, I'll be listening. So I guess just alternating back and forth to make sure that you get it, and just be consistent with it. I've read many, many books many, many times. So it's one of those things that I've read so many books, a lot of times I forget which book they were, or who the author was. Then it comes back to me later. It’s just one of those things you've got to consistently do often, and choose different media. If you're having problems concentrating, maybe you want to listen and read along at the same time. You can do both at the same time and achieve your goal. But the idea is to read, and comprehend, not just to read for read sake. Otherwise, you're pretty much wasting your time.

Jamie Nau: Yeah, definitely. On that front, I think one of the tips for me is I try to do a pretty good job previewing books. So I read the back of the cover and the first page, and decided whether it's a book I want to read or not. But I think there's a lot more you can do than that. A lot of times what I'll do is I'll just pop up a YouTube video of a summary, for five or six minutes on a book, and that will tell me whether it's a book that I should get all the details for, and look at books not really relevant to what I'm doing right now. That's one way I do it. The other way is talking to people about it. You know, I'll say hey, Adam, if you read this book, can you tell me what it's about? So to me, the key to reading is getting a really good preview of a book, because finding out whether you're going to be into a book from the beginning is really important to me. Like I've read those books where you are like, falling asleep while reading it, and you're not getting anything out of that. But if you read a book that you could just jump right into, and you're constantly reading, and you can't you can't take your eyes off it, that makes you a better reader. So that to me, the preview is the important part. Adam, what about you? Any tips for our readers out there?

Adam Hale: 2x speed on audible You know, you can get through them pretty quick. And as Jody said, I don't really have a whole lot of time. Airplanes are great. A lot of times I can get up to like two and half speed if I'm following along. But yeah, two times audible is the way to be. But as far as like finding books, I find it most helpful, people offer them up pretty easily. If you just ask people questions. Sometimes I'll have like a thought, and I'll be like, there's probably a book on that, so I will search sudible and see if I can find out something. I'll do it that way sometimes. Then I'll be talking to somebody, and they'll mentioned something, and then I'll say, hey, hold up. What's that about? And then they'll give me that preview that you're talking about. So I don't go and ask people, or solicit that advice, I'm usually just listening to them. Or you can just straight up ask them like, are you reading anything? Just like a movie, you do the same thing. Seen a good movie lately? You can do the same thing with a book. So those are my tips.

Jody Grunen: I would also say, try writing a book.

All: Laughing.

Jody Grunden: One of the hardest things I ever did IN my life was writing a book, because once it's there, is permanent. I think you take more of an appreciation for what the author has to go through if you've actually sat down and tried to try to write a book. My second book is coming out. The first one is more towards clients called, Digital Dollars and Cents. The second book, which is being released this coming up week, is called Building the Virtual CFO Firm in the Cloud. Book number two is a lot easier than book number one, by far.

Jamie Nau: Well, I definitely appreciate you guys joining. I think this is a great topic and we'll have to do it again. I know there's lots of books that we read, and I think just picking three and just talking about them is really good for our listeners. So any final thoughts from either of you?

Jody Grunden: Definitely read for sure. Reading helps out a lot. Have your team read. When you get a good book, make sure you pass it onto somebody so that they can they can pick up where you left off.

Adam Hale: I think your point early on was that, you know, it's impossible to have all these experiences yourself, and you can share those through reading. In terms of wanting to be a good consultant, the more you read, the more experiences you'll be able to leverage and bring to your to your client.

Jamie Nau: Awesome. Well, great show guys, and thanks for joining us.