The Wize Way

Episode 37: Becoming the plumber in your practice - How to remove blockages in your practice traffic flow

• Wize Mentoring for Accountants and Bookkeepers • Season 1 • Episode 37

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Episode 37: Becoming the plumber in your practice - How to remove blockages in your practice traffic flow


In this episode of The Wize Guys Podcast, Jamie Johns together with one of the Wize Mentors, Thomas Sphabmixay deep dived into one of the biggest challenges that firm owners face as they grow ~ managing the traffic flow.

Jamie walks us through using the Wize Traffic Quadrant and gives us ways to remove the blockages and tips on managing the traffic flow as he has implemented at Sky Accountants. He shares the changes or steps in ensuring that it runs smoothly and minimizing or avoiding such blockages in your firm today.

Find out the importance of team structure and some of the suggested systems, technology, or processes that practice owners can use to become more effective in their traffic workflow when you listen to today’s podcast.



Timestamps:

0:35 - How firm owners struggle in managing traffic flow

2:57 - The correlation between pain and growth

4:26 - The Wize Traffic Quadrant

5:37 - Communication traffic VS Production traffic

8:24 - How to implement a smooth flow of traffic

14:48 - The importance of conducting meetings

16:14 - How team structure helps to manage the traffic flow

21:22 - Best systems, technology, and processes for improving the traffic flow in your firm

28:08 - Key point: Internalize the concepts of communication and production traffic.



Quotations:

“I always come back to progress as more important than perfection. You just have to keep trying to move in the right direction. But if you're gonna focus on perfection, you'll never, you'll never do anything.” - Jamie Johns



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Download the full transcript here.


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Episode 37: Becoming the plumber in your practice - How to remove blockages in your practice traffic flow 


Thomas Sphabmixay: What we're discussing here today is becoming the plumber in your own practice. 1 So how to remove blockages in your practice in traffic flow? So this is a really huge topic. 

Often, we are of the mindset as a technician starting our own business coming in. We're coming into the business and we think we need to be able to process the work. Do we need to be the ones reconciling transactions, or how many payrolls can we do? How many tax returns can we do? But of course, as you're all aware, when you join Wize, we're about building the machine that does the tax returns, that does the payroll, that makes the widgets. 

If we follow that path, we start to encounter challenges. Our firm and our teams and our employees may not necessarily do it to the same level of effectiveness as you are where you may be a hundred percent, they may only be performing at 80%. Where you might think something is common sense and obvious to your team. It isn't so obvious. We're here to discuss how to manage that. What things do we have to have in place to enable your team to be robust enough to be able to handle the problems that come along the way? What sort of preventative measures and foundational things do you need to make sure that you have in place?

It's a good chance to just checklist off on that today, right? See what you have in your firm and what you could be able to implement. Also, better ways to react. It's often we ideally, would not like to be reacting to everything but once it happens and we talk about the 80-20 rule. Here we're discussing the 80% that's going to help prevent a lot of this and the plumbing and how to troubleshoot those issues in your firm.

This month we're all talking about design, and it's really talking about how we're going to build an extraordinary system so that you only need to staff it with ordinary people as opposed to having an ordinary system and requiring yourself to have extraordinary people. This is absolutely key in order to have a business that could run without you or at least one that isn't going to make you a prisoner in it. 

So I covered a little bit of this already, and some of the major challenges that we see here at Wize Mentoring is there seems to be a correlation of, as your firm grows, as you plug in more clients, as you add in more staff, things become a lot heavier. It becomes a lot more complicated. There's a correlation between pain and growth.  Owners such as yourself start to resent the fact that as I'm growing this firm, it's just causing more pain. And that's a huge barrier to growth. You're not going to be motivated to go out there and continue to canvas your services out there on the market, talking to your clients and wanting to service them. If every time you do that, sure enough, your sales are increasing, but who's the one needing to deliver the work? Who's the one needing to go and follow up and chase up and badger your team or badger yourself or the clients are badgering you to get it done? It's the pain that comes with a growing firm. 

Here at Wize, we want to educate you on these tools that are going to decouple that, right? We're going to be able to discuss some foundational things here today that ideally. As your firm grows in revenue, it's going to allow you to be able to withdraw from it rather than add more cement to the prism that's going in around you. So understand that as your firm grows the level of traffic and the volume of traffic increases. We want to be able to show you the techniques that allow you to manage that most effectively. 

So a couple a bit of a brief on the two major tools that we're going to be covering here today that you'll be able to take away with. We're gonna be coming back to this every now and then. Firstly, it's the traffic quadrant. Just a bit of an intro and a brief and then Jamie, you're gonna have a chance to share some practical applications of this, especially from your info at Sky and your dealings with other firms where we're coaching. 

So we talk here a lot about traffic. When we think of our firm, we think there are so many places that work comes in from, we think it comes in from emails, letters, we do marketing, we're doing social media, we're trying to train people. In our mind, there are like a million different things. That seems very complex and complicated. But at Wize, we're about making the complex things simple and we have two categories that we summarize and categorize the sort of traffic that comes into the firm into ~ that being communication traffic and production traffic. And that's divided up into higher-level traffic and low-level traffic. 

So just a bit of an intro by communication traffic, we're talking about all the activities involved with managing the client's expectations. We're talking about activities involved in advising the clients. So it might be emailing, it might be phone calls, it might be physical meetings, but anywhere where you're interacting with the client in order to be able to discover what they need or be able to offer and educate the client on the services that could help them best. Or even when the client's coming to you and asking, ‘Where is my work up to? It's just been so long.’ We classify all of this under communication traffic, its high level, and low level. In high-level traffic, we're talking about the activities that occur with our A and B-class clients, and thus it sits with our senior client manager. For the lower level traffic, generally with the C and D class clients, we have this assigned over to the assistant client manager. 

The other, second type of traffic that we're looking at is production traffic. Production traffic is all about activities that are getting it done and getting it right. Who in your team is concerned about this? That is the senior production manager. Their job is to make sure all the is are dotted and ordered ts across. ‘Cause once the job leaves their hands after their review, or perhaps they're finalization, the client managers are entrusting their senior production manager that it is technically correct. The senior production manager is doing that production traffic at a higher level. They're working together with their team of accountants and bookkeepers in order to get it from zero to 90 or zero to at least 99 or 95% as fast as they can.

Just a bit of clarification, not all emailing and calling, and physical meetings are considered communication traffic. For example, if a bookkeeper had to go and ask a client for a missing piece of information. We are not so strict that it has to come through the client manager in our eyes, that's still part of just getting the job done and getting it right. So a bit of intro there, so we're all on the same page. Of course that all fits in within this deep and narrow team structure, okay? This deep and narrow team structure, it's made up of the senior client manager and assistant client manager that you saw on the previous slide. They're handling the communication traffic. The flow of traffic begins with them. Then it flows down to the senior production manager who is able to manage the production traffic with their team of grinders or production personnel. If we get this right, if we can imagine plumbing and water in our business, if this team structure is set up in this way and we consider those two elements of traffic, it should be able to flow from the top to the bottom and the bottom, managing up to the top. 

Where do we find blockages? For example, perhaps a senior accountant is not trained to the level we need. Perhaps a senior production manager is not doing the activities they're supposed to. Or perhaps a senior client manager is hanging onto the work instead of delegating it down, this all results in the water splashing back onto essentially the owner's face. We want to be able to have the plumbing smooth and flowing through this team. This flow is what we're going to be going into today which leads us to you, Jamie. You've been able to implement this so well, and it's so deeply embedded in the idea of the quadrants, the deepen our team structure among many things. But talk to us, Jamie, about how at Wize you've been able to minimize blockages in your traffic, free yourself from your firm, focus on growing, leadership and mentorship, and guidance of your firm. 

Jamie Johns: Thanks, Thomas. 

Look, I think the biggest thing is I'm stuck for words. That doesn't happen very often. No, I think it's really about getting the right people doing the right work. So you can have all the team design set up, but unless you have the right people doing the right work, it's not gonna work. And so a lot of the time people become control freaks. They'll sort of hoard the information or hoard the jobs that they're doing. Particularly most firms you'll be growing, you'll be getting leads and you'll be getting referrals. So everyone has to grow with the firm. So back on the sort of what you had in terms of the context of that traffic quadrant is making sure that you know the right people doing the right work.

At a fundamental point, the preparation of the bookkeeping, of the bases, and of the tax returns are done by the less experienced staff or the people that are actually doing the production work or the production team or the grinders as we might call them. So those people have to be doing that top work, where the problem lies often that you'll get your most senior people trying to do that work. Then, I always find it's guys often the most senior people who are the busiest people. I don’t know if everyone's found that as well. So, it's a matter of growing with a firm letting go.

One of the things Ed always used to say to me is to push the work down and build up the team. So you've gotta be really conscious as a leader that you can see what type of work people are doing and then have the ability to delegate that successfully. So you have to become really, really good at delegating and then teaching the whole team to delegate as well. It's never about perfectness. You're dealing with people. So I always come back to progress as more important than perfection. You just have to keep trying to move in the right direction. But if you're gonna focus on perfection, you'll never, you'll never do anything. 

The biggest key is getting the right people to do the right work. That's the biggest part of it. But then also make sure that you get the Fab 5 set up to measure the outcomes like to measure the results of what the people are doing. Then once you can see the Fab five, it will be a direct reflection, or a mirror if you like, of how well your team is working both in fees built-in profitability, whip in debts, and all that and the rest of the KPIs. So you've gotta sort of close the circle with this. Once you get your teams organized and get the right people doing the right work, then close a loop on measuring what they're doing. One of the things we use at Sky when we need to drill down is linked reporting, for example. Just as an example to see what people's productivity is and to see what time you're writing off. It doesn't matter whether you're fixed fee or your time built. It’s really just making sure that you've got that Fab 5 dashboard working so that then you can understand where your business is heading from a financial management point of view. 

I'd like to hear from some of the members about what their problems are. The problem tends to be, ‘I don't have enough time,’ or ‘Do I have that's sort of part of that, getting the team structure right?’ Then also measuring how long it's taken to do things. Some firms that I've worked, they have ample capacity, for example. So we do the capacity plan and they've got ample capacity. However, then when you look at the financial results, they're not so good. They have ample capacity, but everyone says they're busy, everyone's flat out. So the key is, how long is it taking to do the jobs? Like where's the efficiency of the firm? Again, everyone probably hates timesheets, but I think we've got 30 people out at Sky and everyone does a timesheet, so it's bottom-up management. 

Then at a high level, at the Fab 5 level, if things are going well or if they're not going well, at least you need the ability to drill down and find out what's not working. If you track the Fab 5, it'll have a direct reflection on the performance of that team that we're looking at on the screen. 

Thomas Sphabmixay: That's right. There are so many facets that have to come together right, Jamie? To get this thing working right, we have to get them into the right seats. We have to give them the right targets to shoot at. We have to educate them on what scope. Each of these roles they have to stay within. As you mentioned, sometimes a senior client manager is having difficulty wanting to delegate the work down. All of a sudden they came up from being a senior tax accountant and we're telling them that all you have to worry about is communication traffic, but production traffic has to go down now. They have a bit of a hard time doing that. 

Jamie Johns: The other thing with this is, it just takes a higher level of teamwork. I couldn't stress how important your meetings are. Like your daily huddle of just 10 minutes ~ What are you working on? What are we gonna get done today? And what are you stuck on? Then, your weekly managers' meeting. 

So your weekly meeting with your people, they're sort of the key things. If you don't have your meetings and you don't have your agenda items, you'll find that people's inboxes just get full of rubbish. Well not necessarily rubbish but they'll get their inboxes will just get full and overwhelming. Some accountants or bookkeeping owners of firms that they've said, ‘I've got 300 emails in my inbox.’ You ask yourself a question if you've got more than the sort 50 or a certain got more than 20 emails in your inbox you'll probably need better systems, processes, and meeting rhythm. Meeting rhythm and routine will set you free. You combine that with that team design. Then with the technology that we've got, you really shouldn't have much in your inbox. It's a common problem that people have. 

Thomas Sphabmixay: Those meeting rhythms are so essential. Jamie, just this afternoon we're going to be doing our own firm's weekly tactical. It's just something I look forward to the most seeing every morning the team open up that Zoom and attend their daily huddle, it's just so key to seeing traffic actually being dealt with. It's a great place to observe as well if the senior client manager that we've designated as say, senior client manager is doing their duty. It's so easy to witness inside of a daily huddle or weekly tactical. 

Jamie Johns: Yeah, Just in terms to finish off. As you know, as your firm grows from it might be 300,000 or 500,000 or 600,000 up to a million, you really need to be aware of putting in place those client managers. You must have a senior client manager who has a portfolio of clients, and then also an assistant manager, assistant client manager has the lower class and the portfolio clients. Because as your firm grows, you as the owner, you're just gonna get busier and busier and busier, and you've only got eight hours a day. As you've just got eight hours a day, so you just have to put those people in place and then allocate them those roles and what those job descriptions involved. So of course, this all involves around finding and hiring, keeping the right people on your team, and then giving them roles. Then then the traffic will flow right from the office manager or the receptionist, everyone knows everyone else's job and who does what. 

So as you grow your firm and it keeps getting bigger, you have to be extremely organized, like really well organized. If the office manager needs to know how to do something, there's no point then not understanding every single task they do, who to email, or who I go to. A few years ago and it'll occasionally still happen at Sky, someone will email me and three of the senior client managers altogether because they don't know, and it just creates chaos. So you have to have your organizational chart laid out and all who the direct reports are. Then you must have the role of what everyone does. So not just from the client's point of view, but internally as well. Who looks after all the books of the firm who looks after all it?  who looks after all the human resources and the staffing problems and the issues? So if you don't sort of build and have in the back of your mind that executive team, the traffic in the firm will just overwhelm you. 

The biggest problem that we see, Tom again is firm owners just don't have enough time to work, on their business and obviously achieve the lifestyle that they want. The ultimate outcome is to try and get this firm to run without you. So that you can oversee, help and you be the coach and the mentor of the people that are on your team as exactly as I am these days. Like I've got five teams now, and my role is just to help and mentor my direct reports and help each of my senior client managers be the best leader that they can be for their own teams and to get all this traffic flowing correctly and just continually educate and drip on people on how to get the traffic flowing right. 

Thomas Sphabmixay: That investment, Jamie, in your balance sheet has obviously paid extreme amounts of dividends. Your teams are highly organized, and your executive team is fully aware of what their jobs and responsibilities are. Thus when they encounter this traffic, whether you take two firms side by side, and then with the level of traffic you have. It just seems so much more organized. It's running like a Michelin-star restaurant, rather than some random shop with no order. 

Jamie Johns: Well, it's never perfect. Like that's what I said earlier, it's never perfect but you have to just continually drive for that vision, for that outcome every day with your team. You'll get there.

Thomas Sphabmixay: Thank you for that, Jamie. 

So just to summarize this for everybody, the importance of managing your practice's traffic flow isn't so much as you can see from how we're going to react. It's not so much from how owners are going to jump in and say, ‘I'm going to do it myself.’ What we are doing here is we're building up our executive teams. We're building out our organizational structure, and our team structure and you are hiring people. You've hired people that you've put in place that you are paying a salary, and you would have expectations for them, and you would want to be able to give them the opportunity to perform their best. So just like our roles as owners, we need to be able to guide and mentor and continuously educate our team in order to handle the traffic flow, rather than us coming in and using our own brute force and being controlling and reacting to all the traffic that's coming into the firm. Because that only correlates the growth of the firm with pain, okay. We want to be in on the side of order the neatness and setting up this deep team structure so that we're able to leverage our leadership and mentorship into the company for greater effect.

Look, Just on this as well, Jamie. Talk to us a little bit about the sort of systems or technology that you've put in place that really has made a big impact. I know it's not one tool or technology, but what are some of you who felt made quite a big difference in cementing that structure into your firm? 

Jamie Johns: I think Thomas, the thing about technology to me is a tool. It's not a lot like I see across the industry. Everyone sort of always talks about technology and goes on and on about the latest step and this, that, and the other. But really it's secondary. Like, it's absolutely secondary. 

The first thing that you need to get right is your, let's call it the people strategy, your team. If you can get that right with the people, and then the meeting rhythms and routine, that's interdependence. Like, that's the high level of teamwork that you want. Then once you've got that, overlay that with the technology. So whether that's Karbon, where you start infinity as a job management system. There are that many systems out there. There's Xero Practice Manager, there's Monday.com or Trello. There are just so many. So you just have to use what's worked for you in terms of the technology. But it's important to get the people strategy right first. The daily huddle, the weekly meeting, and then overlay that with the technology. So, things that you know that have really worked for us is just the video conferencing. All internal communications are Microsoft Teams. We can share our screens. Then when you have the daily huddle, or I think when we have our weekly managers meetings, there's about people in about five different locations, GI office, Ballarat, one of the senior client managers works from home. Then occasionally, you'll have obviously your offshore staff or your distributed teams. Even for example, at Wize, I think, we've got team members from six or seven countries.

So having a job management system, whatever it is, and I'm a few of those earlier. Then make sure that in your meetings, in your rhythm and routine you share on the screen where jobs and priorities are at. Every day those priorities will just filter to the top. A very standard one that I use both in wise and Sky is just a standard meeting agenda in Microsoft Word, for example. There'll be so many moving parts to your firm that you must be extremely organized with your meeting agendas before you have the meeting ~ What's the agenda? It doesn't get removed from the agenda until it's actioned.

Technology is an important piece of it, but you just have to find what works for you. As I said, there's a myriad of pieces of software, but at a basic level, at a fundamental, you must have a job management system. I have met some firms that haven't had sort of any job management system. They've just sort of flown by the seat of their pants. But you've gotta have a job management system and the ability to have transparency. So transparency so that anyone in that team can see where that job is at. Even really high-functioning teams, a bit like Karbon for example. I think you can see all the emails from the client, or you can see the internal emails from other team members. 

As your firm scales, the complexity just will increase. So you've gotta invest in new technology, and new systems. A lot of firms won't scale because they fail to invest in that type of technology. I've seen a lot of firms, for example, they've gone out and got Xero Practice Manager or other firms that then have gone to the next level. They've got linked reporting, for example just to see the financial analysis of each of their team members as well. Then, technology's absolutely critical, but before that is getting the team structure right. So that the actual physical traffic, whether it's communication traffic or production traffic, actually flows to the right person. Then once you do that, you as the owner, you'll be amazed at just frees up your time. 

A lot of people say to me sometimes even when they decide to say, join the WizeGrowth, they'll say, ‘Jamie, well how much time will it take?’ And I just say to them, ‘Look, well, if you do one hour a day of working on your firm, that's enough for the start. The magic of working on your firm and implementing the things that we are talking about is that one hour a day will just naturally grow.’ People say, ‘Well, why does it actually grow?’ Well, the fact is, you're gonna develop systems, procedures, protocols, policies, you're gonna delegate, you're gonna hire new people. I'll never forget it. Like you'll just free up your time because you're doing those things. All those things are quad two activities. Then all of a sudden you've got your one hour becomes an hour and a half. It becomes two hours a day. You've got three. It becomes four hours. Then it'll become like six hours a day that you've delegated it. You've got those people in place because of policies, procedures, systems, and protocols, and you've delegated successfully to the right people. That's what Thomas always says, you become a team builder. That's like my role at Sky. I just build teams. I find trying and find the right people, hire the right people, keep the right people, and incentivize the right people. It's all about people, people, people, people. So, whereas it used to be like, yes, it is all clients. But very close, the second biggest asset you've got is your team members. That's just solely my focus these days is just the team people, systems, and getting it all worked together. 

Thomas Sphabmixay: That is so really insightful, Jamie. It's something that we often forget a lot about how we think signing up for this app, and downloading this thing is going to so solve the problem. Then even after it's in place, we're looking at it and thinking, it doesn't feel like anything's changed because actually, the root of the problem was ~ Who's sitting in that seat in the first place? How have we educated them on their roles in the first place? Then all we've done is taken something that wasn't organized and chaotic. Say, in a brick-and-mortar environment, and just digitized it if anything. So thank you for that, Jamie. 

Let's talk about our next steps and action points. I want to leave you with an action point to take away for today. Your action point for here to take away today is to go back into the Wize vault and understand and really internalize the concepts of communication and production traffic. Internalize the concepts of the deeper narrow team. It's a multifaceted thing, okay? 

One of the things is we see that a lot of firm owners after learning about the deeper narrow team, go off and just start handing people titles. They start calling, alright, ‘I'm ready to do a deeper narrow team.’ Just like Jamie said, you are the senior client manager, you are the senior production manager. That may seem like the solution, but what's important is just to understand how it functionally works. You don't need to go and jump and hand people titles just yet, but you start to earmark people and slowly educate and mold their personal job description towards what the deeper narrow team is supposed to be. Thus, you're in the mode of change management. You're going to encounter pushback, you're going to encounter situations where people you've handed say a review job to a senior accountant and they're not liking that. So you just have to step back a little bit and try a bit of a softer approach. 

As you are going through this journey, just understand that there are going to be early, middle, and late adopters. Your early adopters are gonna be happy to jump on board, but they're also happy to just switch to the next shiny thing. Middle adopters just wanna seize it out a little bit, but they're ready to come on board as soon as it all looks like it's working just fine and there are results coming through. Then you of course have your late adopters. People who after time and time and time again, still resist the ability to change. You might have to be able to invest further in these people to actually get them across the line. But no person is better or worse than the other. Everyone has their pro and con. Even late adopters might take a while to change, but once you get them into a new system, they're unlikely to go and switch their minds just because something else has come along the way. 

So just getting some perspective at when you are, when you are implementing these things is going to help you out a lot. As well as understanding that there's a short there's a medium and there's also a long term. In the short term, things aren't going to be the way that you would like them to be. You might be a 20, 10, 5, or 30-year-old firm. None of this is going to happen in a short period of time. So in the short term, things might just have to be exactly the way they are. But what's going to change now is that your long-term outlook is that you're going to build out a blueprint that is going to give you a deeper narrow team structure and allow your communication and production traffic to flow through your team which allows you to withdraw from it. 

The next step is as you can see, focusing on understanding the two traffic types. We bookkeepers and accountants, we think in terms of a chart of accounts, we see bank transactions come through, right? There are all sorts of things. So just in like the same mindset, our chart of accounts as leaders is communication and production and we're going to think of categorizing into one or the other. Then it's going to give us the ability to think about which person in our team is going to handle that and focus on it. Like Jamie mentioned, being a team builder and being a team educator, rather than going in and jumping in and doing it yourself.