ron baker, founder the three most - cpareport.com · “my accountant just doesn’t treat me ......
TRANSCRIPT
![Page 1: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/1.jpg)
Ron Baker, Founder VeraSage Institute
The Three Most
Important Key
Predictive
Indicators
![Page 2: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/2.jpg)
“Because its purpose is to create a
customer, the business enterprise has
two––and only these two––basic
functions: marketing and innovation.
Marketing and innovation produce
results; all the rest are ‘costs.’”
Peter Drucker
![Page 3: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/3.jpg)
![Page 4: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/4.jpg)
A Gedanken
![Page 5: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/5.jpg)
A Gedanken
United’s KPIs:
On Time Performance
Lost Luggage
Customer Complaints
![Page 6: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/6.jpg)
From Worst to First, Gordon
Bethune
![Page 7: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/7.jpg)
“When we’re looking for goals for an
entire company, we make sure our
employees know what we’re going
for: to get the planes on time, not to
aim for a certain return on
investment. Goals such as certain
equity or debt ratios…work fine for
accountants…But when it concerns
the whole company, we need a
companywide goal–something that
employees can immediately identify.”
–Gordon Bethune, CEO, Continental Airlines,
From Worst to First: Behind the Scenes of
Continental’s Remarkable Comeback
![Page 8: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/8.jpg)
“This is one of the most common
problems in businesses. Businesses
fail because they want the right
things but measure the wrong
things–or they measure the right
things in the wrong way, so they
get the wrong results. Remember?
Define success the way your
customers define it.”
–Gordon Bethune, CEO, Continental
Airlines, From Worst to First: Behind the
Scenes of Continental’s Remarkable
Comeback
![Page 9: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/9.jpg)
“What you can
measure you can
manage.”
––The McKinsey Maxim
![Page 10: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/10.jpg)
Scottish proverb: “You don’t make
sheep any fatter by weighing them.”
![Page 11: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/11.jpg)
“The only way to look into the future is use theories since conclusive data is only available about the past.”
–Clayton Christensen, et. al. Seeing What’s Next
![Page 12: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/12.jpg)
Why Do We Measure?
• How do our measures contribute to our competitive advantage?
• We get what we measure
• New Strategies + Old Measures = Old Behaviors
![Page 13: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/13.jpg)
What’s Your Canary in the Coal
Mine?
![Page 14: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/14.jpg)
Key Predictive Indicators
Economist Classifications:
Lagging (unemployment, prime rate) [Hindsight]
Coincident (PI, Mfg/trade sales) [Insight]
Leading (Mfg new orders, bldg permits) [Foresight]
![Page 15: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/15.jpg)
Why CPAs Lose Customers
1. “My Accountant just doesn’t treat me
right”
2. Ignore them
3. Fail to cooperate
4. Let partner contact lapse
5. Don’t keep them informed
6. Assume they are technicians
7. Use as training ground for new team
members
![Page 16: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/16.jpg)
Why People Select CPAs
1. Interpersonal skills
2. Aggressiveness
3. Interest in the customer
4. Ability to explain procedures in terms the
customer can understand
5. Willingness to give advice
6. Perceived honesty
![Page 17: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/17.jpg)
What Customers Want
• Invest in new areas of our business
• Help us think/develop strategies
• Be proactive w/info in our industry
• Meet with us to brainstorm
• How do we compare to others
• Suggest things we should be doing
![Page 18: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/18.jpg)
Firm-Wide KPIs
• Turnaround Time
• HSDs™
• The Value Gap
![Page 19: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/19.jpg)
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
Cost
Price
Value
![Page 20: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/20.jpg)
Customer Existing Value Created
Existing Revenue Yield
Customer Profit
XYZ $2,500 $1,000 $1,500
![Page 21: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/21.jpg)
Customer Potential Value
Potential Revenue
Value Gap
XYZ $5,000 $2,500 $2,500
![Page 22: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/22.jpg)
![Page 23: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/23.jpg)
Net Promoter Score (NPS)
Typical company loses half customers < 3 years
The Ultimate Question: How likely is it that you would recommend this company to a friend or colleague?
Dell had highest NPS
www.netpromoter.com
![Page 24: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/24.jpg)
3 Types of Customers, 1-10 Scale
Promoters (P) = loyal enthusiasts (9-10)
Passives = satisfied but unenthusiastic, easily wooed by competition (7-8)
Detractors (D) = unhappy customers trapped in a bad relationship (0-6)
P – D = NPS
![Page 25: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/25.jpg)
Constructing a Theory
• Observation (How do you know?)
• Categorization (Rank what’s important––Occam’s Razor)
• Prediction or Explanation (So what?)
• Confirmation/Falsification (If not, revise, start over)
![Page 26: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/26.jpg)
Key Predictive Indicators
Most importantly: KPIs define success the same way the customer defines
success
![Page 27: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/27.jpg)
It’s 12:41 a.m: Do you know where
your package is?
![Page 28: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/28.jpg)
FedEx Service Quality Index
(SQI)
Hierarchy of Horrors:
Right-day late-service
Wrong-day late-service
Complaints/Traces
Missing points of delivery
Invoice adjustments requested
Missed pickups
![Page 29: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/29.jpg)
FedEx Service Quality Index (SQI)
Hierarchy of Horrors:
Damaged packages
Lost packages
Abandoned calls
International SQI
![Page 30: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/30.jpg)
Harris Interactive poll, N= 23,000
Only 37% clear understanding goals
Only 10% felt org holds people accountable for results
Only 10% tracked success measures
Only 10% have clear, measurable, deadline-driven work goals
Only 20% fully trusted org
Only 13% high-trust, cooperative relationship with other groups/depts
![Page 31: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/31.jpg)
www.journalofaccountancy.com
June, 2009
Pricing on Purpose: How to Implement Value Pricing in Your Firm
November, 2008
The Firm of the Future
April, 2010
Project Management for Accountants, by Ed Kless
![Page 32: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/32.jpg)
Twitter @ronaldbaker
Phone 707.769.0965
VeraSage website/blog
www.verasage.com
Thank You!
![Page 33: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/33.jpg)
Dell’s Dashboard
Three critical success factors:
1. Order fulfillment
2. Product performance
3. Service support
Anything missing?
![Page 34: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/34.jpg)
One Lexus/Toyota KPI
Lifetime cost of ownership
High quality parts
Manufacturer warranty on used cars
![Page 35: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/35.jpg)
Walt Disney World KPI for loyalty
to resorts?
![Page 36: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/36.jpg)
![Page 37: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/37.jpg)
Management Ideas 1900-2000
• Scientific management
• Cost accounting and variance analysis
• The commercial research laboratory
• ROI analysis and capital budgeting
• Brand management
• Large-scale project management
• Divisionalization
• Leadership development
• Industry consortia
• Radical decentralization (self-organization)
• Formalized strategic analysis
• Employee-driven problem solving
![Page 38: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/38.jpg)
The Problem with Efficiency
![Page 39: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/39.jpg)
Why?
![Page 40: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/40.jpg)
The Problem with Efficiency
![Page 41: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/41.jpg)
The Antithesis of Efficiency
• Continuing education
• Knowledge management
• Total Quality Service (Ritz-Carlton)
• Mentoring and coaching
• Networking
• Social media
• Pricing on Purpose
• Client relationships (efficient with things, not people)
![Page 42: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/42.jpg)
Human Capital, Not Cattle
![Page 43: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/43.jpg)
Knowledge-Worker Effectiveness
• “What is the task?”(Definition, delegation, deadline)
• Autonomy (Greek for “self-governance”)
• Continuing innovation
• Continuous learning and teaching
• Efficiency = Learning Curve
• Quality at least as important as quantity
• Treated as Human Capital Investors (volunteers)
![Page 44: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/44.jpg)
Knowledge Workers KPIs
• Marginal Contribution to Firm Revenue/Value
• Customer Feedback
• Effective Listening Skills
• Effective Communication Skills
![Page 45: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/45.jpg)
Knowledge Workers KPIs
• Risk Taking, Innovation & Creativity
• Effective Delegator
• Ability to Deal with Change
• Continuous Learning & Coaching Skills
![Page 46: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/46.jpg)
Knowledge Workers KPIs
• Personal Development Plan
• Number of Customer Contacts/Week
• Pride
• Passion
• Professionalism
• HSDs™
![Page 47: Ron Baker, Founder The Three Most - cpareport.com · “My Accountant just doesn’t treat me ... KPIs define success ... Project Management for Accountants, by Ed Kless](https://reader031.vdocuments.net/reader031/viewer/2022022511/5ae39a387f8b9a097a8e5af9/html5/thumbnails/47.jpg)
“It doesn’t make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do.”
Steve Jobs
Apple Computer