The Modern CPA Success Show: Episode 29
We decided to bring back Tom Barrett from Navigate the Journey. We are joined by Adam Hale to talk about employees. In this episode, we move beyond the basic job description to talk about the essence of the roles that your employees will be filling.
Getting the right people into your company, and having them in the right roles is a cornerstone to running a successful business. Listen for Tom’s insight and tips on organization charts, hiring, and aligning your people with your company’s core values.
Jamie Nau: Hello and welcome to today's podcast. We decided to bring Tom Barrett back from Navigate the Journey, as he did such a great job in our last podcast. So once again, Adam Hale from Summit, and Tom from Navigate the Journey. We're going to go down a different path this time than we went last time. So welcome to the show, Tom. I know we're going to talk about employees, but anything you want to start off with about how to keep employees happy?
Tom Barrett: Yeah, thanks, Jamie. Thanks, Adam. Thanks for having me back. So, yeah, in terms of keeping employees happy, I think it all goes back to what Jim Collins said in Good to Great. You've got to get the right people on the bus, the wrong people off the bus and the right people in the right seats. So I'd say the quick answer then to your question, Jamie, is in applying all of that, you’re going to have happy employees. So that's it. Podcast's over.
Jamie Nau: All right, let's end this thing.
All: Laughing [in audible]
Adam Hale: Yeah next question. Where the hell are those people and what are those seats?
Tom Barrett: Yeah the whole, where are they? Well, I can't help you with that. In terms of the seats, as an ESO implementor, the first thing we do in implementing EOS is figure out what we call an accountability chart. And so that's how we create seats. It's a effectively the five major roles that a person is going to have in their job. So that's what we call a seat. And it just makes clear what's expected from each person in order for the organization as a whole to be successful.
Jamie Nau: So when you're talking seats, are you talking just leadership or are you talking all the way from top to bottom in every role within your organization?
Tom Barrett: Yeah, top to bottom. So when I'm helping a client create an accountability chart, I even have them put on their vendors or contractors. So, for instance, if they're using a fractional CFO, I will have them put that on there because the fractional CFO needs to have the capacity to do their job really well.
Adam Hale: I think what works for us, too, is I think the big distinction there, too, is trying to figure out the difference between a job description and in what you're talking about in terms of what they need to be great at. Like what they have to be accountable for. I think whenever you walked us through that, we kind of struggled. We're like, OK, so this is what they need to do day to day, not necessarily. It's what they have to kind of own, right?
Tom Barrett: Yeah, that's a great distinction, Adam. So, you know, job descriptions are obviously great and are needed. But one of the really helpful things about taking that kind of high level, like if you ever see what a seat looks like, I mean, we boil down those five roles into five bullet points and oftentimes it's like one or two words per bullet point. And so, yes, it's not tasks or activities. It's effectively what's the essence of the role? What are the results they're really responsible for? What areas of the business are they uniquely responsible for?
Adam Hale: Yeah, and I think that was really, again, for us personally here at Summit. I mean, Jamie, our accounting director, is here because of the accountability chart. So whenever you were kind of walking through and stressing to us, and I think we even tried to get a little bit even narrower and went like top three things, you know, just to say as focused as possible. The other thing that we tried to do with the accountability chart, we're big into forecasting. So we blew it out a little bit. So whenever we did it, there were roles on there where we were putting different people's names multiple times, knowing that at the end of the day, I didn't want to be responsible for A, B and C. And so what came to fruition for us at Summit whenever you kind of help walk us through that, was that my role as COO, I was kind of like this this other role that we determined and created called an accounting director, that was Jamie. And then Jody was more acting as like a CEO whenever we looked at actually what was getting owned in that seat. So we were able to take a shift and then bring Jamie into the fold and make him responsible for stuff. And it just it worked out. I mean, that's how we got our director concept and everything really rolled out.
Tom Barrett: Yeah, yeah. I remember all that. Yeah. That reminds me of when I'm working with a client and we're working through creating an accountability chart, the most fruitful and productive and value added conversations is when they're not just talking about their structure, they're also talking about their strategy. They're starting to talk about other scenarios. This would be a better way to structure the business, create this role. We would just be way more effective and efficient, or they can also see their future moves. So that is definitely when you're seeing your structure in a whole different way that's going to make the company better.
Jamie Nau: And what I thought was unique about it, and just to kind of give a little bit of backstory, originally Adam came to me and said, is this something you'd be interested in? And I think it was probably in the preliminary conversations that you guys were having together. And I said, oh, yeah, that sounds like something I'd be interested in. Let's be quite frank. I think it's something I'd be good at. And that was kind of the conversation Adam and I had at first. And then we originally got to the point of okay, this is the role we're going to put you in, and to Adam's point, it wasn't right away. It was like, right now we want you to lose about half your client base and do this job half time. That was kind of how it was the first year. Then as we grew and we got more clients, there were more clients and more CFOs for me to direct, and I lost a couple clients, it was definitely a step down path. Is that something pretty common that you see? That it takes a little while to get to that full role?
Tom Barrett: So, yeah. So a concept with seats, it doesn't necessarily have to be a full time job. It can really be anywhere from five hours a week to, full time. So, oftentimes in an entrepreneurial business a person is in more than one seat. So Jamie, while you were transitioning from one role to the other, that accountability chart is kind of a great way to help people see not just you in this case, but also everybody else in the organization to of what's going on here in this transition. What it looks like and also the why behind it as well.
Adam Hale: Yeah, good cover, Tom. Yeah, we just we couldn't afford it and we wanted to make sure you didn't suffer…
All: Laughing [inaudible]
Adam Hale: No, that's totally true. I think that the visualization in the optics of the team is important. So whenever we rolled that out, a lot of people are like, why Jamie? What is he going to be doing? How is that different from what you're already doing? And so by us mapping that out, we were able to say, these questions, these things, that's Jamie. These things are me. You know, there's a little bit of an overlap there, but I think we made a pretty good distinction and that really helped us. So that's one of the first things that I jump into with clients is, hey, do you have an accountability chart? Most people don't know what I'm talking about. They have an organizational chart and they can kind of talk through things. I kind of go through that concept. I know that, you know, we do have a lot of clients that that work through EOS, but those that don't, that's kind of an introduction for them.
Tom Barrett: Yeah, and typically, you know, every organization kind of has an org chart, but usually it's just simply stating what is, and a very boiled down. Person A reports to person B, and maybe their titles, that's it. So part of the trap there with a traditional org chart is that you're just describing what has been, what is today, but you're not going into that future scenario planning that you all did at Summit, right? And that's helped to make the firm better.
Adam Hale: So if we mapped that all out, we got the you know, for us, we have the structure in place. We know what it looks like. I mean, for Jody and I know it was like, this is what we want it to look like in three years. So we built a little bit bigger than what we currently were. So we had the structure in place. We felt like we had the right seats. Then I guess the next step was, I don't know, we felt like we already knew who the right people were because they were kind of quasi playing in that in that realm anyway. So it was one of those things where we had to formalize it. Like whenever we went to Jamie, he was kind of already acting a little bit in that capacity. But I mean, I think we should dive into that a little bit deeper, though. I mean, what are some of the things whenever people are talking about? Because a lot of times people take their best manager or their best producer, take them off the board and think they can manage people, which is a mistake. So what kind of things do you suggest we do? Kind of walking through that to make sure we get the right people?
Tom Barrett: Yeah, so going back to the whole Jim Collins and also EOS, right people right. Seats, to kind of finish out the right seat, maybe let's talk about the way we look at right people in EOS to kind of finish out the right seat. So after you get your accountability chart built. So we actually take this position that again, its function first and people second. We actually don't build it based on the current people. It's like what does the organization need? And so in order to put people in seats after the whole accountability char is built out, we ask three questions. Do they get this seat? Do they want it? And then do they have the capacity to do it? In EOS we say, it's got to be three yes’s to actually put that person in the seat. So, Adam, the example you gave there, maybe somebody who was a good producer at a lower level, kind of a good technician. So if you're looking to put them into a supervisory seat, they may not get it, want it, or have the capacity to do it. So by wrestling through those three questions and saying yes or no.
Adam Hale: So will help us with that. Because it was a great tool that we even did, we've done it with multiple roles within our organization. I know you've kind of walked us through that at different times. So what does it mean to get it, want it and have capacity?
Tom Barrett: Yeah, so again, this goes back to, you know, when EOS was put together as a system it was like okay, how are we going to simplify ensuring that we have people that are in the right seat? There is a written definition that you can find out there. But basically we say is, do all the neurons and the person's brain come together when you explain the position. So, you know, you have a 401(k) practice, right? So if you were to show me that position, maybe ten or twenty percent of my brain would understand really what that is. I probably wouldn't understand a ton of it.
Adam Hale: So on the get it thing, because there's two different things there, right? You have to get it technically. But then there's also functionally. So again, I think that's what, you know, usually whenever you have a super producer, they want it. They just it becomes almost like the next step for a lot of them. Not always, there is a difference of rock stars and superstars kind of thing. But most of the time, if they're achieving at a high level, they want it or they think they want it. And you know they get it because they're technically the best person there. Unfortunately, they might not get the management part of it. So I think there's an important. How do you kind of distinguish between the two of those?
Tom Barrett: Yeah, again this is hypothetical but say somebody who was a producer looking at putting them in a supervisory position. In EOS we have those five roles, those five major roles, if you're a supervisor in EOS one of the five roles always is what we call LMA, stands for Leadership Management and accountability. And basically, are they able to do all of those things? Are they able to be a great boss? And so in order to be able to say, yes, that person X gets this supervisory seat, it would actually include yeah, they can be a great boss.
Jamie Nau: For me, obviously I've worked in accounting for a long time and I've worked with a lot of really good accountants. Then when you're in public accounting, at least in a large firm, the natural step always is for them to move up into that supervisory role. And it pretty much happens all the time. Now, that's not necessarily how we do it at Summit, but I've been surprised by people, how fast they picked up the management part of it, the leadership part of it, and also people that I thought would do really good at it and didn't do as well. How do you look at someone who's never done it before, who's never been in that leadership role and decide whether they get it?
Tom Barrett: Yeah, that's an interesting situation. So in the hypothetical we're talking about here, say if somebody never really had any supervisory experience before, or has done it very lightly, I actually would go to the second question, do you want it? That actually is more often where I find the breakdown in terms of why someone is not a great supervisor or boss. They just don't want it. They're kind of falling into the you know, what Adams alluded to that maybe they were a great technical producer. And it's just sort of assumed that I've been here for, whatever, five years or fifteen years. So it's just assumed that I should get the promotion to the department, because if not, there's something wrong with me and that's not helpful or good thinking for the individual or for the company. And so, again, that's where I'd go back to, do you want it? Because if they want it and then we have some sense that they get it and have the capacity to do it, I'd be willing to give them a shot.
Jamie Nau: That makes a lot of sense.
Adam Hale: Even though, like I said, sometimes I think people want it because it feels like that next step. So that one for me is like tough. And then the problem, the conflict that I have sometimes is whenever I don't think you get it, but you think you get it. You know what I mean? It's like well, Tom thinks he gets it, but I'm not sure if he's there. So let's go to the next one then. I mean, because those can be kind of tricky lines. But I do like for us, I will say just real quick, whenever we did all three of these, whenever you're comparing people, then it becomes easier to discern yes or no to those questions. Because whenever I'm comparing Adam and Tom and Jamie, it might be like, does he get it? I don't know. Well, compared to Jamie he does, or compared to Adam he does. You know, one of those things. So it's easier to like kind of make that charted out whenever you have multiple people next to each other. So that said, like the capacities does that just mean I physically have enough time? Or what is it?
Tom Barrett: So that third question we ask capacity, it has a lot in there. Time capacity is a big one. So in an entrepreneurial business there's always a history and a culture of people having more on their plate than they can humanly possibly do in a 40, 50 plus hour week. And also people often have a hard time delegating and letting go of responsibilities. Oftentimes why businesses get stuck is actually even your best people because they're still holding on to certain roles and not delegating and they don't have enough time, that can be a reason to get stuck. So when I'm working through the people analyzer, that's the whole tool we use with right people right sear, and when it comes to the capacity, probably the most common reason initially for somebody to get a no on capacity is actually time. But of course, it is easiest one to fix. Getting to delegate something from them. And of course, also the assumption that there's somebody that can actually take that responsibility from them.
Adam Hale: Yeah delegation, we could probably spend an entire podcast on delegation. So also with capacity sometimes for us, like you said, it's the ability to get it done within a certain amount of time. But we just know that for us, sometimes we know a certain role requires you've got to juggle or you get to spend these eight plates at once. Does somebody have the capacity to do that? They're really great at doing one at a time. But whenever you make them spend four or five at the same time everything crashes. So at least in our world, that's kind of how we look at capacity a lot of times.
Tom Barrett: Yeah, and to finish out the capacity in terms of how we look at it in EOS. Time is big, but it's also things like relational capacity. Emotional capacity to do that particular role. Ultimately when I'm working with a client wit capacity I ultimately say, you know, all those things are true time, emotional capacity, but also the other big thing, ultimately, is all about can they produce the results that we need to out of the seat? Are they getting the job done? And a results aspect to capacity as well.
Jamie Nau: So we've talked a lot about promotion and internal movement here. So let's say we build our structure and we're able to fill two out of the three leadership roles, but the third one, there's just no one within our organization that has the ability to do that. I think it's a lot easier to make those assessments on someone you've been working with for six months, a year, 18 months. How do you judge those three things through the interview process?
Tom Barrett: Yeah, yeah, that's great. So, again, having clearly defined an accountability chart, helping that person see the bigger picture, but also what will be required of them. Then in the interview process, what I would do is I would ask very specific questions that would help you assess, do they get it? Want it? Have the capacity to do it? Including things like when I call three of your references and I ask them, you know, some kind of aspect that's going to get behind you getting it, wanting it, having the capacity to do it, it's going to make it very real for them and you're going to find out from their experience and history, and not some sweet talker trying to say good stuff in the moment. That's not fully true. So I would just bat them really hard on how their past demonstrates they get it, want it and have the capacity to do it.
Adam Hale: What about the people analyzer? You mentioned that earlier. I think that's a pretty cool tool. Is that something that you can use on somebody that you know, not that hasn't been in your organization? Is that something that you can kind of use throughout the hiring process or not?
Tom Barrett: Yeah, great question. So it is technically designed for somebody that already has been hired and you have experience with. So it would be, you know, technically not the best to apply it directly in a hiring situation, although I think the concepts apply and actually the other part we haven't talked about here is actually what makes for a right person. So we believe what makes a right person is that they fit your culture, they fit your core values. And so one hundred percent, when you're in a hiring situation, you need to be betting against your core values because on the presumption, which is a presumption that you've actually identified your true core values, you've got to make sure that the person you're bringing in, they won't be rejected by the culture of the office. It'll be a hand in glove kind of fit culture.
Adam Hale: Well, yeah, no, that was that was another I mean, that's a good point. I mean, I guess the way that we work together initially, we kind of worked in little pockets of these things. So, you know, how they all working together. But the culture is a big thing and we go through core values. When we're meeting with the prospect, we tell them what we what what's near and dear to our heart. You know, whenever we talk about humor, we're like, well, you got to be able to take a joke because we're all smartasses around here and we always just kind of just throw one liners, zingers at people all day long. So, like, if you're somebody that gets uptight about that, this isn't going to be the atmosphere for you. But if you can take a joke and just kind of roll with punches, you'll love it here.
Tom Barrett: Yeah, and the thing is, the really important thing is that Summit, you have discovered your true core values because frankly, almost the vast majority clients I work with when I initially work with them, the core values they have truly aren't core. So they fall into a few different what we call core values traps. They either have what we call aspirational core values. They're not true today. They need to be or they hope to be true in the future. They may be using what we call permission to play values. So that can sometimes be things like honesty, truth and basic behavioral.
All: Laughing [inaudible]
Jamie Nau: It's funny I just had this conversation today with Zach, and I think this is something that, you know, I have been through so many core value and mission statement conversations, Zach made a great point saying having your core values be operational. Make sure that you actually have them as part of your operation. I think that once we went through our core values and Adam and Jody were like, okay when we're hiring, you guys need to make sure we're looking at these. To me that was the first step, this was more than just like a two hour meeting for us to get warm and fuzzy. This was actually something that we're going to apply going forward. So ever since that moment, like whenever I hire, I make sure to think about those core values because it is that important.
Adam Hale: Another one is candid as well, it is a core value of ours. We have some pretty, you know, regimented every two week 360 reviews. So if you're not, like, telling people like this is what we really value in the organization, they might look at it like it's an attack. But if you can kind of set the tone and say, no, this is for betterment, we just want to make sure that everybody's getting on the same page. It's a real nice like here's what's going right. Here's what you could use a little bit more work on those kind of things. It just sets the tone early on, I guess.
Tom Barrett: Yeah because again, too many companies, their core values are just these kind of bland generic statements that are in these posters of people, you know, climbing mountains or…
Adam Hale: Yeah, that's what I thought it was. I thought that at the beginning because I was just like, I'm not big into that kind of crap.
Tom Barrett: Oh, yeah, neither am I. There's a lot of it out there and yeah, that's not what we're talking about.
Adam Hale: No, I mean, I think not only that, I mean the core values, I'll even take it a further step. Like we went through our core values and not only looked how to apply to our internal team, but how it applied to our customers and how we worked with them as well. I mean, we have like a nice little kind of, you know, one sentence or after everyone how we apply it and we talk to our team about that. When something goes sideways with sideways with a customer or something goes sideways with the team member, we always come back and we say, hey, like, how are we working through these things?
Tom Barrett: The one aspect of the core values that I always reiterate is that they are behaviors that are going to actually define the right person, because sometimes core values get defined in these kind of ways that are just true about the organization as a whole, and not individual people. So, yeah. So the way to discover and write your core values is those are behaviors that individual human beings should be doing consistently.
Adam Hale: So core values is the starting point you think? And the accountability chart, if we are kind of doing these things in order?
Tom Barrett: Well the concept is we believe that you got to get the right people on the bus. So again, people share your core values and then get them in the right seat. So how that works is well you create the whole accountability chart, then you have all of your seats and typically, you know, a person is hired for one particular seat. So but then, you know, at some point things grow or change and maybe they're up for a promotion. So then you have to evaluate them for another seat because you can have two people situations. One is that you have a right person, but for whatever reason, they're in the wrong seat. They don't get it. They either don't get it, want it, or have the capacity to do it. So then you're going to have to ask, is there another seat in the company that they could get it, want it, have the capacity to do it? So typically, the smaller the company that harder that is. Not impossible. The bigger the company the more change there is as possible. Then the other kind of people situation is you've got a wrong person in the right seat. So the kind of classic example of this is, say somebody who's like a salesperson or the sales leader, they're just knocking it out of the park, you know, phones ringing off the hook with sales. Frankly, they're the productive jerk, right? Is that allowed on this podcast? Am I going to get bleeped out?
Jamie Nau: Jerk is definitely allowed.
All: Laughing [inaudible]
Tom Barrett: Both situations are really hard, right? Because it's like the person is delivering, they could be delivering a ton of value to the organization. But because they're not the right person, they are killing your culture in more ways than leaders recognize.
Adam Hale: Yeah, I think that's an important distinction too, because it does seem like whenever we deal with people problems, a lot of times it's like, it's kind of those two things. Either you've got somebody that's killing it, but unfortunately, they're kind of a cancer to the culture. Or on the flip side, you have somebody that's super loyal, great champion of the company, just lives out everything, but they're just not, you know, like they just can't perform. So a lot of times people try to like, move them around and create something, because they know that good people are hard to find. So they want to find something within the organization. I guess what I just heard from you is, you just can't do that. I mean, if the seat doesn't exist, you have to have a hard conversation and move people along.
Tom Barrett: Yeah, completely, because there's another aspect here. Another line I like to use my clients, it's not what you preach, it's what you tolerate. So if you're if you're tolerating either a wrong person who doesn't fit your culture and your values, or somebody who's not in a right seat, you're kind of breeding these things that you just don't want to be true. That behavior doesn't matter. That performance doesn't matter. Both of those things are absolutely essential.
Jamie Nau: I've been in enough of those conversations and they are hard. It is hard to let people go. But to your point, and I think it's a really good point for us to end on, but I think that if you have that wrong person, what does it say to the rest of your company? What is the message you're sending there? It’s like oh, I don't have to perform because those two people over there have never performed. So I'm fine. Or what it takes to be successful in this company is to be a jerk, you know, or whatever that message is. When you have employees, you are sending a message to the entire team. So you kind of have to act quickly when people are in the wrong seats.
Tom Barrett: Yeah, completely.
Adam Hale: Well, that sucks. So it's really hard to get great people in the right seat. Luckily we have your team and we've been able to kind of build out the framework. We've got a bunch of really awesome people in really great seats. That’s my takeaway. You just need to be very deliberate about that to bringing somebody in.
Tom Barrett: Yeah and there is a kind of a chicken and egg thing here, or success begets success, or really failure begets failure. So that's why, you know, for all the listeners out there, I would say, 80 percent of the time I work with a client, I'm sure even you all as CFOs, so much of the conversations are around people. So for your listeners, if you know deep down that someone or some subset of people are just not working out, or are not the right people not the right seats, you've got to confront that straight on and you've got to make it better because ultimately you're not going to get what you want out of your business. We actually say you have to have one hundred percent right people in the right seats. So that's really the path to the ultimate business success.
Jamie Nau: I think we've hit that hard in this podcast. I can tell you, it's worth the work. I mean, I've been in companies where it wasn't right and we had a lot of people in the wrong seats, the wrong people, and it wasn't a great place to work. Then I feel like at Summit we're there. We have a lot of people in the right seats and it works really well. Everybody's moving in the same direction and it makes work going to work really easy every day. So I think that it is definitely worth all the work that we put into it.
Tom Barrett: Yeah and it's actually no harder to run a great company, than a mediocre company. It really isn’t, it's just there may be more hard conversations or hard decisions, but ultimately running a great company is actually easier than running a mediocre one.
Adam Hale: I was going to say as an owner, I can tell you the peace of mind of just having the clarity of knowing that people are where they should be and having that vision of what the company looks like. I mean, we spent a lot of time in the finances and blowing those things out. But obviously the people are the most important, you know, the most important asset that we have as a as a company. So putting them in the right place just provides such peace of mind for us that it's a great exercise and highly recommended. And, you know, you can do it by yourself, but I know that Jody and I couldn't have done it by ourselves. I mean, we tried for years and weren't really deliberate, and Tom really held us accountable to it. I really appreciate you walking us through that process.
Tom Barrett: And you got Jamie now. So it all worked out.
Jamie Nau: For now.
Adam Hale: Until the next accountability chart, and we move around a little bit.
All: Laughing [inaudible]
Jamie Nau: Well I definitely appreciate you joining us. I know we're going to have you on again Tom in the near future here. So we look forward to having further conversations about this. I think this was really important for our listeners. So thanks again.
Tom Barrett: My pleasure. Thanks.
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