Practice Success Podcast

Jen Hamilton on the 6 Pillars of Success in an Accounting Firm

• Canopy • Season 2 • Episode 11

Share episode

Jen Hamilton joins us on the Practice Success Podcast to share her six-pillar framework for assessing a firm’s health. She highlights how identifying and addressing weak areas can lead to transformative change and explores the challenges of implementing those changes effectively.

KC Brothers:

Welcome to another episode of the Canopy Practice Success Podcast. I'm one of your lovely hosts, Kaci Brothers, and I'm here today with Jen Hamilton. Hi, Jen. Hi, Kaci. Thanks for having me. Thanks for being had. Um, give a quick introduction to yourself because you have an interesting role that I honestly. Haven't heard anybody do before.

Jen Hamilton:

Well, thank you for that. It's been a fun ride as, as always with any career changes. So I started my career as a CPA was working for PricewaterhouseCoopers. And then when I moved, um, the practice focus that I had was not offered in San Diego where I'm from and where I still am. And so I went into a very small local firm who then got bought up by a regional firm. So I've been in all kinds of accounting firms. Started my career and really appreciated being able to experience all different environments. Um, but yet there was something calling me to more than just the finance side. So I now am no longer a practicing CPA and I shifted into some of the leadership and operational, uh, parts of a business. And for the last almost five years now have been, uh, Fractional COO. So two

KC Brothers:

accounting firms specifically. Yeah,

Jen Hamilton:

two accounting firms. So I know your world, I've been in your world, but I also know there's so much more to it than just the client experience. I wish that's all we had to do is show up and serve our clients, but it's not. The operations side needs to be running as efficiently as possible so you can just do your best work for your clients. And sometimes the teams aren't quite. You know, doing what they need to do and processes are there. And that's the part where I love to help get everyone, um, doing what they're supposed to be doing and rowing in the same direction.

KC Brothers:

Oh, I love that. Um, yeah, because I mean we've all heard of, especially in the space, fractional CFOs because that's something that accountants can do. I personally, I have people in my network who have been part of fractional C level things where it's like, Okay, well we're going to go insert ourselves as a fractional CMO, fractional COO for who knows what. But you are the first person I've heard being a fractional COO. to accountants, which I love because this hits on something I'm passionate about. And I know I've talked about on the podcast, and that's just rethinking your operations and your processes. Um, so I'd love to start with, um, maybe a story, if you can think of one, I'm putting you on the spot of one of the most analog or atrocious. Operations you've ever seen and what, what about it? Like, you know, like if you heard, if you're saying this and someone were listening to this, but, but that's me. I like my post its. I like my Excel, you know, like what, what? Tell us a story.

Jen Hamilton:

I'm not going to name names. We're going to protect the innocent, right? Um, but. I actually have, I can even blend clients in this realm of so much is tracked on Excel. And I think in the accounting world, we love our spreadsheets. And so, yeah, um, I can't stand reminders by post its, but you see it happening. Like the, the, it's all over their desk, all over the computers, you know, tasks. Reminders that are really important that get lost. Um, but I think one of the biggest atrocious ways that people work is having spreadsheets for like CRMs and tracking. And, like, they, guess what, the spreadsheet doesn't remind you. Um, and having automation and having some, just even a little bit of sophistication nowadays outside of being able to just say, well, who's in my spreadsheet? Who's in my Rolodex? Which is even worse when it's just like a bunch of pile of cards. Um, whether it's a CRM or not, but how are you making sure that you are able to Work with potential clients and existing clients and follow through on your pro promises. Like to me, that's the big thing that I would be embarrassed by and have been embarrassed by with clients is like, can you really hold yourself accountable if you are not having a system that is holding you accountable? Yes. So post-its and, and spreadsheets, um, notebooks, things that, uh, folks. Think will keep them to do list, you know, it just, it's not gonna actually allow you to be your best and do what you intend and what you promise to do.

KC Brothers:

I love that, that like, yeah, we don't realize some instances where our own processes are getting in our way from actually delivering to a standard that we want to deliver on, that we want to be known for. Um, I read about a book a while ago called Building a Second Brain. Which, if you're this person and you're struggling with this, this is a quick read and worth it. Um, our brains aren't meant to remember and hold everything, and like, I don't think we get, um, worth or satisfaction from remembering. I think the moments where we get worth and satisfaction from is when we are value additive. When we are con consultative.

Yes,

Jen Hamilton:

I love that because I think the thing is if you really think about what your client is paying you for

KC Brothers:

Yes

Jen Hamilton:

Are they paying you to remember or are they paying you to strategize? And help them see something and know something they don't know I don't think they're paying you to remember, I think what they are counting you on is using systems to help free you up to be strategic.

KC Brothers:

And they might not say that. In fact, they won't. They may not even realize that. But, um, yeah, you need to, when it comes to operations, you can't have your tools requiring things of you. You need your tools to work for you, not the other way around.

Jen Hamilton:

Absolutely. I like to think of your tools as another team member. And if you, like, like with your team, are having to overly manage, And overly, um, keep an eye on it and cause it to happen. Just like a human team member. You're not getting the most productivity out of your tool or out of your team. It really should be that it is managing you, like you said. I think that's a really great test to see. Is this effective? The tool should be making your life easier. Making you more productive, making you focus on the right things, not the other way around where you're getting bogged down in what is, you think, your effective system.

KC Brothers:

Yeah. But Jen, I, I don't have time. I'm at capacity. Or, or I'm comfortable. I, this is the way I know of what, what, what, how, what is your response?

Jen Hamilton:

Well, let's just say you're not alone because I've heard it many times and it's real. Like I don't want to set it aside. It is, it is real. Um, the thing is, is it ever going to change? So if you're comfortable not having time, if you're comfortable not being your best and potentially, and I hate to say it, but especially nowadays, if you are not on top of your tech, you will be surpassed by others, maybe even within your own firm or competition, um, or younger people that are in the workforce, but you will be surpassed. So it's not a, it's not a luxury. It's a requirement. It's.

KC Brothers:

Yeah, and it's not an if, it's a when.

Jen Hamilton:

Exactly. So, as much as you may not want to hear that, and maybe I'm the one who's going to be the one that tells you you've got broccoli in your teeth, but like, if you are not taking the time to be able to, like, just even a little bit of time to be proactive instead of reactive, because if you don't have time, That's the whole reason you need to set aside some of your time to be able to build yourself as a more productive, more effective professional.

KC Brothers:

Yeah, to that point. I actually heard something just this week. Um, someone citing I, I'm playing the, um, telephone game here because I heard someone say that someone, I heard someone say that productivity experts say that you don't in fact ever want to be operating at 100 percent capacity. That's not when you're most productive. You want to be operating at about a 80 percent let's say, and we know these percentages are all subjective, right? But the reason being that you still always have that wiggle room to be introspective and to look, am I doing this the most effective way? Can I get better? I just completed this process for this client. I have it coming up for this client. How can I fine tune it?

Jen Hamilton:

Anytime you can take a pause and reflect and look at continuous improvement, you will be better serving yourself, better serving your firm, better serving your client. Because if we just keep being on the hamster wheel of what you've always done, again, you're going to be passed.

KC Brothers:

Yeah. And again, going back to even like the value you feel as an individual, that's not when you're going to feel most valued. That's not when you're going to feel, um, most accomplished even. You're going, sorry, you're going to say something. Oh no, I was just agreeing. Go ahead. Yeah. I'm glad you agree. I wish, I, I see a lot of Um, individuals, not just in accounting, but we do see it a lot in accounting. Um, and I think because we've had some real, it's a, it's a really ancient practice. Accounting has been around for a long time. Uh, PricewaterhouseCoopers has been around for a long time. These are not, this is not e commerce. This is not social media, right? But, but, But because they've been such longstanding industries, they come with their baggage. And some of that baggage is this, um, hours tracked, you know, this hamster wheel mentality. And it's like, that doesn't equate to output productivity or value add even, you know, and, and especially intrinsically and how you feel about what you're doing.

Jen Hamilton:

I appreciate you bringing the intrinsic part because when the day is done, a lot of times we lose people to the profession. I am one of them who looked for somewhere else because of burnout. And it's, it's more about results. If you can look at results and outcome instead of just hours and productivity. And that's where you, you hit that. Like I'm trying to get it the a hundred percent instead of backing up and giving you the space to, like you said, to have the value of yourself, be able to make a bigger difference in your thinking and your strategizing, having. The chance to take a beat and be creative, that's where you're going to get fulfillment. That's where you can combat that burnout because if you just go, go, go and keep performing, keep performing, you're never going to be able to truly feel like you are giving your best. You're giving your brilliance and you have it. You just need to give it some space. To be able to give that to your team, to your clients, even to your family. I mean, I think one of the hardest things is being so focused on production versus outcomes. You do then end up. Usually losing that outcome with the people that are most important in your life or your hobbies that are most important in your life Like it's important to have yeah, it's not just work life balance. Trust me. I know I work I put in the hours But I put in the hours um also around the things that matter to me most having my time to go and Do the exercise I love, the travel that I love, the volunteering that I love to do. It's, yes, it's going to make a more full schedule, but it makes a more full life.

KC Brothers:

Yeah. Yeah. So when you're brought into a firm with an, a love for Excel and, um, the post its, maybe some, I don't know, whiteboards, what are some other, um, atrocities? Anyway, when you're brought into this world. Where do you start? What, what are some of the first things you recommend that they start to look at or, um, rework and retool?

Jen Hamilton:

So it's a good question. So one of the things I like to, to do is begin with a diagnostics and assessment. There, in my mind, there are six main, what I call pillars to a business. And each firm needs to have each of these pillars strong because in a business, just like in any, um, House or something. If you put something on columns, if you have certain pillars that you're on, if any one of them is weak or cracked, the whole thing wobbles, it's not strong. And so there are six things that I look at. So what, what I'm looking at is it's not always the same situation that each firm needs. It may be one or others that are really strong. And so I'm looking for what is weak. So just to kind of share, so you can think for yourself, what are these things that my business should have? Be, um, strong in each of them. One is strategic direction. So do you have goals? Do you have a mission? Do you have a vision? Do you have everyone like going in the same direction and know where they're going? The second is leadership. So knowing how to have great people get great results out of your people. The third is team, which includes your leaders too, but does everyone know what's expected of them and held accountable to it, making good decisions. You know, so in other words, you have a team you can count on to do their, to do their job. The, uh, the next one, the fourth one, is client experience. I know that's where we love to spend a lot of our time is our client experience, but do you have that opportunity to make sure you're meeting their requirements? The promises that you keep, are you even able to give them a wow experience, you know, or is it just sort of there?

KC Brothers:

I can't tell you how much, sorry, just, just double down on that. Because I, when I entered the space and started to get to know accountants, I again and again, heard accountants say how much they love their clients and how much they like to work with their clients. And I'm just glad we might need to double down on that after you say the sixth one, because

Jen Hamilton:

yeah.

KC Brothers:

There is, there's this wonderful, um, connection, um, and, um, sense of, uh, what's not loyalty, but like, just, I just want to help them. That is just so wonderful about so many of my accounting friends and the people that I've talked to that it's been such a common thread that I feel like most accountants. Probably are operating this way, but yeah, I got into

Jen Hamilton:

it. Yeah, there you go. Yeah. We just want to make a difference. We want to bring our brilliance, which happens to be in the finance world. And now my case finance and ops to folks that struggle with that and be able to have their lives be a little bit better just because of what we are gifted with. And that's part of why I love the client experience. Um, the two other places to look at in your business are, um, your cash flows. So as finance people, we understand that, but a lot of people, yes, we want to know, um, what our cash is, but cash is coming from profitability or you're in trouble. You all know how, how cash flows and P and L's work and things like that. But one of the things that is most important is the productivity. And so looking at systems and looking at automations and looking at practice management work and. Um, utilization rates without burnout. Like all of this is going to cause you to have more profitability. The more

productive

Jen Hamilton:

your folks are. Um, and the last one is revenue development is you've got to, in order to grow, you have to keep doing your marketing and sales. And I look at it from an operational point of view. Which is, are we tracking our rates? You know, are we, um, able to see, that's why CRMs are so important. How are things converting? And then we can be able to adjust and then train our people accordingly so that we can hit the numbers that we're trying to hit with our, with our revenue. So for me, to go back to where you start, I look for, and hopefully you can even just do a self assessment in what I shared, rewind if you need to hear it all, but be honest with yourself and your firm. What parts are strong and what parts are a little cracked in that pillar? And that's where I like to start, is looking at strengthening. Proven tools and processes as we all do. We love the, we love our processes and to be able to, to start to strengthen. I will say though, in almost every case, there's something around your team that is missing. At least for when I'm brought in is, is oftentimes, is there not, um, clarity on why you're here? Like having the, the vision, the mission, the values, is it not having clarity on what's expected of you or how you're. Measured beyond utilization rate and your hours billed, that kind of thing. So a lot of times there are some great work we can do around that team, because as I said, productivity drives profitability. So we want to make sure that your biggest asset is your team are really firing all cylinders in a way that also doesn't burn them out.

KC Brothers:

Yeah, yeah. Because these, some antiquated analog operations and processes really, it's so, busy work is so almost demoralizing. Um, no matter your level of skill, most adults really do want to, Be trusted. Most adults really do want to produce. Most adults really do want to accomplish things. And so busy work is just such a suck on, um, morale, productivity, um, desire to stay around. And man, it costs a company, a firm in this instance, so much money when you lose an employee and you have to start all over again.

Jen Hamilton:

Absolutely. And that relationship with the client may be damaged.

KC Brothers:

Yes, that too.

Jen Hamilton:

Which could also hit your revenue line, not just your expense.

KC Brothers:

Yeah. Okay. So you've identified, um, where a pillar, um, might be fractured. Um, change is hard. Any change is hard.

Um,

KC Brothers:

so how do you help firms? either do this in bite sized portions or, or maybe just wrap their brains around the fact that this is going to be painful for a little bit. It's a big change. Some, maybe something we can do small, but maybe there are other things that we have to do big. How do you, how do you approach that?

Jen Hamilton:

Great question. Change management is always fun. So I can't work with a client who's not willing to try something new. Be held accountable, be told, hey, you're doing this wrong. Not that I call it out like that, but that's what it's going to feel like. Right. And so if they're not willing to do the work, it's not going to work. So that's the first thing is that you're, you have enough pain. Essentially. It's not going well enough. That you're willing to make the change and to hold the team accountable to make the change. So it starts with that desire, that motivation so that it's really clear as you're communicating to the rest of the team. Here's why we're looking to make these operational structural improvements, how it's going to help them, how it's going to help their clients. You know, as individuals in your firm, and then, of course, the overall firm, if you just go in and say, Hey, this is gonna make her for more money. That's not their motivation. So as with any change management, you want to be clear on like, where your team's pain points, the folks that have to buy into this change. And listen to them. My guess is that what the firm needs is also what they need. And when you find that alignment, that's where we can start to get buy in. And, and you're right, you do it in bite sized pieces. One of the things that I think is really important, which is why I start with that diagnostics, is I'm looking for the bite sized piece that's gonna, like, be the, the beginning of the domino effect.

I

Jen Hamilton:

like to make sure we, we do the, One thing that's going to help a lot of things. And so that to me is what's really fun is kind of essentially getting at the root cause and solving from the root of the challenge, not just the symptoms.

And

Jen Hamilton:

that's when things really start to fall into place. So for me, that's, that's fun is finding that, that beginning domino and starting to see it tip and everything else start to get better.

KC Brothers:

Yeah, so do you ever have an instance where you've got majority buy in, but you still have people who are skeptics? How do you manage that or how do you? Consult your clients to manage that because I bet you it's probably better coming from them than it is from you unless I don't I mean, maybe maybe it is better to have that separation say I'm the third party. This is what I advise. So the, the

Jen Hamilton:

answer to your question is do, does that sometimes happen? The answer is it always happens. There's always someone who's not fully bought in. And, and I'm not saying forever. Um, but there's, I don't, I can't even think of a time when someone wasn't somewhat resistant.

Yeah.

Jen Hamilton:

For whatever reason. You know, it's just. It's just kind of the name of the game, right? So, um, what's interesting and part of why I shifted more from consulting and advisory to being a fractional member of the team is that I do have this beautiful balance of being, like you said, that third party, that outsider. I can see things they can't see because I have fresh eyes. But I also have the authority as a member of the executive team and really like second in command to the managing partner to the owner if it's still owned By an individual like we are a team to make these things happen So sometimes it is better coming from me depending on the culture And sometimes it's coming from, um, the managing partner or the owner. What I like to do though, is help strategize with the, the leaders of the practice or the firm to figure out what's the best way to communicate. Because every culture is a little bit different. Everyone's a little bit different. And so it's not like a one size fits all way to, to get people on board. But a surefire shortcut, if you're just trying to figure this out, well this works with the sales, it works with getting your kids to eat broccoli, is what's in it for them, right? So if you really take the time to understand whoever's that resistant, like what is it that they don't like about the world and how what we're gonna do is gonna make the pain that they have a little bit better, they're much more open to it. And that's for me, the, the kind of the, the discovery I'm looking for is where can we get the two initiatives to align? Like, you want this better, the firm wants this better, guess what? We found a solution that we can both make this a better day, a better way that you can feel going home at night and be like, Oh, okay. That was a better day than it has been.

KC Brothers:

Yeah, I love that. Um, I'm sure too, you've got plenty of use cases and examples of, Hey, but also if you just listen, let me tell you about all the wonderful things. I know, like to your point though, in that instance, listening to those people who are hesitant to change really does go a long way, um, regurgitating their words back to them, helping them feel heard. Yes. All of these other, just. Um, techniques in human behavior and responding to humans like they are humans goes a long way with change. Um, and, and to your point, there's usually always a shared goal, shared interest. Um, I'd, I'd love to maybe close with like one of your biggest success stories too. Like what pie, maybe not pie in the sky, but like, Something that my people hear and be like, Oh, I want that. That's possible because I'm, I, you and I were operation girlies. And I'm such a fan of like, if I can offload it from my brain and use my brain for what I want to use my brain for and go home at the end of the day and, and be with my girls and not be distracted by my brain, trying to remember an incessant number of things, right? Like I'm happy. I'm a better employee and I'm a better mom and I'm a better rounded individual.

Jen Hamilton:

Yeah.

KC Brothers:

And you're healthier, too. Yeah.

Jen Hamilton:

Absolutely. So I, again, I'm going to protect the innocent. Um, so I came into a firm. I ended up working with them for about 10 months when I first came in. Uh, this is just a couple of years ago, but I love this story. They were post COVID really exploded. Um, went from three people in their firm to 30. within just a few years. Yeah. So basically what I like to say is they started to break by their growth. Um, I would explain it to other people outside of the world. It's like they had a gold fish bowl of a firm and they put a shark in it. And it was just like, things were breaking all over the place. Systems were breaking and things weren't being, time wasn't being put in. They weren't following up with people. Client complaints were just piling up. And so it was just like everything. can break, did break. So sometimes growth that is not sort of measured and, and structured, like building the scaffolding around the firm is what could take you down. And that's what we were, we were afraid of. So what was happening with this, um, firm owner is that she was working. I wish I was there. 16 to 18 hours a day. She did not really sleep and that included the weekends. She loved to travel, loved to be able to just come explore the world. So she would sometimes take vacations, if you can call them vacations, because she would be still working and being called by the team because people couldn't make decisions without her. They didn't know what they were doing. It was just, it was a hot mess. She started to get. A few good people into her leadership team. And then they decided to bring me on to kind of help sort of rally the troops and get some form and some structure around them. Um, they had tried a different. If you're familiar with the entrepreneurial operating system, EOS, they had tried putting some of those pieces in some worked in some, they just didn't put in. Right. And so they were trying to put in operational pieces, realizing that that was it. And then within the 10 months, we really started to work on being super clear on what was just getting so, so simple. What was it that they promised in their marketing to their potential clients? And then how did the people deliver on that promise? Um, Really started to look at the marketing was great. The, the position of the firm owner was very inspiring. It was all great, but they weren't delivering on it because what we started to see is that the people that they brought in, they weren't very intentional, tensional about who they hired. In this fast growth, because it was like, Oh my gosh, we just need people. And basically what we ended up saying is that in order to be able to continue to grow, they were going to have to shrink. And that was the work that we did. We said, okay, we got to look at who truly is a fit who wants to be held accountable. So we put in more accountabilities. People started to rebel. They didn't like being seen that they weren't meeting their billable hours, that they weren't, that they had most of the client complaints. You know, all of these things, and so, they just weren't, this wasn't the place for them. Started to have people start to quit because of bringing in the accountability, which is great. You know, this is our expectation. If you're not meeting it, we're going to hold you to it.

KC Brothers:

Get the right people on the bus. Absolutely. And if they're not in the right seat, move them to the right seat.

Jen Hamilton:

Yeah, exactly. So there was a lot of that work putting in clear expectations for that client experience so that there was a more consistency in how the clients were coming in on boarding, how they were served, all of that kind of stuff. So again, putting in these great systems. Well, so what ended up happening? Yes, the firm did shrink. Um, and what? What was able to happen is they started hiring really good core value fit people with the right skills. Um, this was a fully remote firm, so they were able to actually expand and be able to bring in folks from other parts of the country. So open themselves up to be more picky because they didn't just have to get in their local area. And, uh, when I, when I last checked in with the firm owner, because as the right team members came in, I was able to step back, I like to get my replacement in place, I was able to do that as I left, when I last checked in with her, um, After she got rid of all the people that didn't work, she was able to, yes, have a smaller firm, but her profitability went up, her actual personal income went up, and she was able to take, no joke, a four week, no one called you vacation to Antarctica. Like, literally. To me, that's, that's what we want for everyone. It was amazing.

KC Brothers:

That's it. And with that, we'll end because what an inspiring story and all because of good operations, systems, tools, communication to your point, team experience, and looking at, you know, what are we doing to deliver on our promises? Oh my goodness. That's so, so inspiring.

Jen Hamilton:

Thanks. I was proud of them. They did the work. I mean, I was there reminding them what work it was to do and holding them accountable. But when the day is done, that's why I say it starts with, are you willing to make the change? Because man, it's worth it when you do.

KC Brothers:

Uh, well, thank you so much, Jen. What a wonderful conversation. Thanks, Casey.