The Wize Guys

Episode 51: Are you working IN your business? or ON your business? - overcoming the barriers to growth and implementing the Wize 7-Division Org Chart

April 20, 2023 Wize Mentoring for Accountants and Bookkeepers Season 1 Episode 51
The Wize Guys
Episode 51: Are you working IN your business? or ON your business? - overcoming the barriers to growth and implementing the Wize 7-Division Org Chart
Show Notes Transcript Chapter Markers

Episode 51: Are you working IN your business? or ON your business? - overcoming the barriers to growth and implementing the Wize 7-Division Org Chart

The only difference between some people’s journey is that some people are able to transition from changing the way they think.

In this episode of The Wize Guys Podcast, Ed Chan and Jamie Johns, together with one of the Wize Mentors, Thomas Sphabmixay discuss the importance of working ON your business rather than IN your business.

At Wize, they use the 7-divisional organizational chart, which helps practice wonders to identify which roles or activities should be delegated to specific divisions. Also, the org chart helps you as the firm owner to plan your withdrawal journey from the business.

So, if you want to find out what’s the biggest barrier to growth and how you can start implementing the Wize 7-division org chart in your accounting or bookkeeping firm, then head over to this week’s episode! 


0:00 - Intro

0:35 - Are you working IN your business or ON your business?

1:32 - What are the barriers to growth and how to overcome them?

4:21 - The importance of leadership

7:42 - Wize 7-Division Org Chart

17:30 - How to take action


“It’s important to take a look at our 7-divisional organizational chart because it also helps you plan your withdrawal journey out of it.” - Thomas Sphabmixay

“If you can change the way you think, you can change your life because the way you think leads to the decisions you make, and the decisions you make leads the outcomes.” - Ed Chan









PS: Whenever you’re ready… here are the fastest 3 ways we can help you transform your accounting/bookkeeping practice:

1. Join 40,000+ subscribers to our transformation Friday tips – Every Friday, our Wize Mentor and Thought Leader of the Year, Ed Chan will send one actionable insight from his experience of building a $20 million accounting firm that still runs without him – Subscribe here

2. Download one of our famous Wize Accountants Growth Playbooks – Our FREE Playbooks on how to build and scale your firm are more valuable than most PAID business coaching programs! See for yourself – Download here

3. Join the waiting list for a free login to the world's best accounting business intelligence software for scaling your firm. Take a look at the app we use to build our own $10million firm in just 7-hours a week – Get a FREE login here

Thomas Sphabmixay: So the topic we have here today is DESIGN and what we're discussing here today is are you working in your business or on your business? And more specifically, we're gonna be diving into the 7-divisional organizational chart. 

Here to take us through this today are Ed and I. It's really important that we reflect on whether we are working in our business or on the business. It's much easier to visualize when we have our 7-divisional organizational chart laid up before us. It's very easy to see, ‘Oh, am I performing a role or an activity that really should be delegated and should belong to a division? Or am I actually working on the division and making it more efficient and more systematized and more independent of you?’ It's important to take a look at our 7-divisional organizational chart because it also helps you plan your withdrawal journey out of it. 

Before we dive into all of this, Ed, I really want to get your insight on this to get us started. What are the barriers to growth? How do we overcome them? And how does this eventually lead to the goal of having a successful business that runs without you?

Ed Chan: Yeah. Thanks, Thomas. 

That's a great question because we all sort of grew up. If you like doing the same thing, we all grew up doing the work, so we know how to do the work. I've always said the only difference between some people's journeys is that some people are able to transition from changing the way they think. And if you can change the way you think you can change your life because the way you think leads to the decisions you make and the decisions you make, leads to the outcomes. Outcomes determine where you end up in life. So if you can change the way you think, you can change your life. 

You want to change your thinking from a grinding perspective to a minding perspective. If you can't transition your thinking, it's gonna be very difficult for you to change your business. Generally, the way a grinder thinks is, we all grew up as grinders doing the work, and I used to think I lead more. I don't have enough time. That's what I used to think. ‘I don't have enough time, I've just gotta work harder. I've just gotta put in long hours and I've gotta do it by brute force.’ The mindset change that I needed was to go to a manager. And the manager's thinking is, ‘I don't have enough resources. I don't have enough people to do the work and they're not trained well enough. So I better get in there and train them, and then I've gotta then find the right people for the right jobs.’ So it's a bit like I've gone from playing, being the player on the field in a sporting sense to being the coach. 

So I'm trying to find the right people for the right positions, and some people are not suited to certain positions. I'm constantly looking for the right people for those positions. Then I've gotta train them. And when I had a grinder mindset, I would say, ‘Well, it's quick if I just do it myself, so I'd just jump in there and do it.’ So imagine if the coach said, if the coach of a football team said, ‘Oh, it's quick if the player's hopeless, I'll take him off or her off and I'll just go in there and play their position for them.’ So I had to learn not to do that. And I had to learn to coach to bring them along, lead them, empower them. Nobody taught me how to do that. 

When I started my business, I went from grinding. In order to scale it to get it bigger, I had to change my mindset. I had to learn how to lead and how to change the way I was thinking because the way I was thinking was keeping me from growing. I just couldn't sustain doing it by brute force for the next 30 or 40 years. Because back then I was only 30 or 40 years, and it just wasn't sustainable. Brute force was just not sustainable. 

The question was. ‘What's the greatest barrier to growth?’ And I say that it's your mindset. It's the way you think, but that might sound very simplistic. It's actually very profound. Until I discovered that little gold nugget, I was just working enormous hours trying to work harder and not smarter. 

Thomas Sphabmixay: That's one of the greatest things you've taught us, Ed, the importance of leadership. We can put all this effort into setting up these seven divisions, we can put all this effort up into all these systems and deeper narrow teams, but if we don't have or respect the leadership abilities it takes to actually run the team, it's just so quickly that it could fall apart. And that is one of the biggest major barriers that I personally had to overcome. I'm sure all of us had to all overcome, is thinking like a leader. 

I wanted to bounce off you from this, Ed. What is some advice you could give to us as firm owners that could assist us in becoming better leaders since it's such a great barrier to actually having a high-performing firm? 

Ed Chan: Yes, it's very true, Thomas. 

You can have the best people around you. You can hire the best people and they're very skillful and they know how to do the job extremely well. But if you don't lead them and you expect them to just step up, then it's not gonna, it's not gonna work. 

So you're gonna have the best systems in the world, and you're gonna have the best people, and they're gonna be so well trained. But if you don't lead, then it's all gonna fall apart. And I've seen that happen over and over where certain people think that they've set it all up and then they can step away from it and not lead the whole thing falls apart. So leadership is a huge part of that.

But not everybody is a leader. Some people like to follow, but they don't like to lead. So the most important thing is to make sure you play people in position and not outta position. If you are gonna scout if you're the owner of the bus, owner of the business, or you are a senior client manager, if you are not a leader, if you don't have initiative and you don't have self to drive and the initiative to and not procrastinate and wait for things to happen, you've gotta make things happen. That's what leadership is about. You've gotta think about the people below you and that it's not about your own productivity, it's about the productivity of your team. If you're not thinking team and you're just thinking about yourself, then you're not a leader. It's best that you don't pretend to be one because as I said, not everybody either wants to do it or is able to do it. And there's nothing wrong with that. There's no negativity toward it. You just need to work in your flow, work in the flow that you're comfortable with. But if you are a follower, you need a strong leader in your team. And because without that strong leader, then you'll tend to wait for someone to give your instructions. 

As I said, in the sporting team, you have a captain, you've got a coach, and not everybody's gonna be a captain. There's something wrong with that. As I said, we all have our roles and our positions, but if you want to be a senior client manager in an accounting firm, you have to have to be a leader, you have to have initiative, and you have to make things happen. You can't wait for things to happen and you can't procrastinate. If you do, your whole team will procrastinate. I've often said that as a leader, if you want your team to go to 80%, then you've gotta go to hundred percent because you are a role model. Everybody's watching you, and whatever you do, they'll do 80% of what you do. So if you want them to work at, so if you are going at 80%, they'll be going at 60%. And if you don't lift yourself to a higher level, then your people will work at the level that you are setting. So you are the role model. Everybody's watching you and they're watching your body, they're watching your body language, they're watching the way you speak, they're watching the way you behave. They'll mimic that. So if you are irresponsible and you're trying to get away with things and you're taking shortcuts, well they're gonna do that as well. I can't stress that enough. 

Not everybody's cut out to be a leader. There's a huge amount of responsibility. There's a huge amount of pressure. And not everybody wants that. That's okay because we can't ever have everybody as leaders, but we do need the senior client managers to be the leaders of their teams. They need to lead.

Thomas Sphabmixay: Very well inputs Ed. 

Look to dive into now the nitty gritty, let's dive into the seven divisions. If you're a part of Wize Mentoring before you probably would've heard us go through the seven divisions. But it runs so deep and the way it's able to explain the scope of a Wize firm, what exactly we need to do to build it up, and what sort of leaders we need to put into each division becomes so clear when it's all laid up before us. Jamie, if you'll be so kind as to take us through the seven divisional org charts and how this aids us in basically building up a business that would run without us? And perhaps going to these divisions, what are some of the barriers in setting up these divisions that could ultimately affect our growth as a firm?

Jamie Johns: Yeah. Thanks, Thomas. 

Well, everyone, I know when you start out, you have to wear all the hats. So I started my business from my home office and anyone the same with your biofilm did start it yourself. You definitely have to wear all the hats. So you, you're the cleaner, you're the receptionist, you're the admin person, and you're the marketer. I used to joke ‘cause I was the director. I was the director of the shareholder and the employee. So you just won't have to wear all hats. 

So I think Thomas, the biggest barrier is as your firm grows, you have to change professionally. I know that I have to change how I thought about things and that that was a bit of a challenge. I think they say, ‘By the time you're about 25, you're pretty set in your ways,’ Thomas. You've really gotta take stock of how you used to do things. As Ed says, they're all born outta production. Most of this, I started in bookkeeping in my career. I started in bookkeeping and then started teaching people bookkeeping actually, and then ended up becoming to do management accounting and then did public practice in the end. That's how we got into what we do today. 

The thing is when you start is realizing that you have to delegate. So you have to delegate effectively. When you delegate, you have to lead people, you have to mentor people. So I think leadership can be learned as long as you are open to it and willing to change. That was the biggest thing that Ed helped me with, was just leading the team. Ed has all these fantastic sayings like, ‘seek the facts, pick your battles, don't have videos behind your eyes, and don't get paranoid.’ All these we're putting a book together on this, aren't we, Thomas? So all those things were really, really helpful. 

Another thing was Ed would say sleep on it. It’s really about big decisions. So when you're hiring people, never hire quickly but do it slowly. That was a massive lesson then we got WizeTalent. But if you quickly run through the divisions, one board of directors, if you're the owner of your firm, you'll pretty much sit in that seat the entire time. But that's very strategic. You must think strategically as an owner of your firm. So you really should be least monthly looking at your figures. Then when you scale your firm up to pass a million dollars or whatever your long-term goals are, make sure that you as the owner of the firm or as the general manager or CEO, make sure you keep looking at the figures. And once you get senior client managers at least sort of monthly or at minimum quarterly, if not monthly, look at your Fab Five, and if you dunno what the Fab Five is, make sure you do a deep dive into the videos on Fab Five. Because leadership is all about showing people the results of their actions. That's really, really important. I couldn't stress that un enough as a leader because see when you're the owner of a firm, you should be at the helicopter level, you should be up higher. You should stop cutting the wood and standing up and looking out over the forest to see where you are. That is so critical. So you've gotta do that as a leader. And particularly when you've got client managers, you must show them the results of their actions as well. So that's really that sort of at the board of directors. 

Then of course, you know, back in the early days, I didn't do any marketing, I just got referrals. But, once you wanna step back from being the butterfly and become the butterfly catcher. Ed says that we need to create a garden of butterfly sort of thing. So in marketing, when you're starting out, often you won't do much marketing, but as you get bigger, and if you want a healthy source of leads. It's good to do marketing. So these days, for example, we have a full-time person who just does the marketing at Sky Accountants and they're in the Philippines. So once you get to a certain scale, you can definitely step back from marketing and you can even have someone that's very strategic at marketing as well. So there are so many things in the WizeVault around marketing, third-party testimonials, you can enter business awards, and you can get testimonies from your clients as well. So there's so much work you can do in marketing. It's great. 

Sales are one of those areas that as your firm grows, it's probably one of the biggest steps to remove yourself from. Traditionally the client managers ~ the senior client managers, and the assistant managers, look after the sales. So when I went through that process, it was a matter of just putting the senior client managers in place and, helping double back in the meetings, micro-training them, Thomas. So that they know exactly what to do. And it just takes time. 

I had a call yesterday with someone about how to get trust and loyalty from their team. The way to do it is to spend time. You can't demand trust and you can't demand loyalty. So you must spend time with them. When I say time, you must spend hours with them. You can't just ring them every day and say, ‘What are you gonna get done today?’ like the daily huddles. One thing, that's just one aspect of it, but to get trust and to get loyalty is people want to grow in their careers. They want to succeed in their careers and the way to help them is to micro-train them. And micro-training doesn't mean five minutes, because it means going through a set of procedures, and policies to invest in people. I couldn't stress that more to everyone here today ~ invest in people, but not just five minutes here and there. It doesn't work like that. So that sort of leads onto to sales where you can pull yourself out sales, invest in people, same with production, micro-train people, have standard operating procedures and checklists, and teach your senior client managers that they have to invest in people. Actually, middle-level management's the hardest to fill anywhere in any organization. So your role as a firm owner is to create a leadership level underneath you. That's really a challenge. So it's a bit like Ed says it's always easier just to do the work yourself, isn't it? You should never say, ‘Oh, it's quicker if I just do it myself.’ That's just like the hamster on the treadmill. You must just keep stressing to invest in people. When you invest in people, you'll win their loyalty and you'll win their trust. You have to earn it both ways.

So you're moving through this org chart here, Thomas, and then you sort of get up to division 5 - quality. That's just a matter of setting up some systems to survey your clients. That's the biggest, the net promoter score (NPS). And there are lots of those ones to do. I like to call that a quick win. A lot of firms, if you're not doing that, make sure you survey your clients when the jobs get done of how they're going and then provide that feedback to the people that are doing the work that is responsible for the client managers.

Office admin and division 6 are great. Sometimes firms have their bookkeepers and accounting accountants doing too much admin. So make sure the admin people do the admin and the rest of the team do what they're supposed to be doing. So you wanna make sure that people in divisions 3 & 4, getting a level of productivity, doesn't matter whether you're fixed fee or not, you must measure efficiency, but you don't want them doing admin. It's really good to hire, one of your first hires can potentially be an admin person who can just take all, do a list of all your admin tasks and then you can delegate them effectively and invest in them to do the admin. I did that early day, probably the first couple of years of my firm had an admin person.

Then division 7, which is really critical. I would say not only just to do your own internal books, but that's important of course, but make sure you get the Fab five done. When over I'm speaking to people, mentoring people, or helping people, I will absolutely do a sprint. I would say Thomas a sprint to the five and I think I see people's eyes light up when I show them the Fab Five. Then how once you've got senior client managers, once you've got people in teams, which is really important, and then their results and their facts are in the Fab Five. That's a real breakthrough, like an epiphany of saying, ‘Oh wow, well, does that person need to set a budget for you?’ ‘Yes, they do.’ They have a budget, they're in charge of the team, they set the salaries, and so forth. And as long as you empower them and give them some leadership training.

Many years ago, Ed came to our office and we did some leadership training. There are different types of leaders, so that sort of thing. In each of those divisions, Thomas has their own challenges. But I think, one of the big challenges, once a firm gets to the right size and you've got trusting and loyal staff is one of the biggest steps in division 3. Once I get client managers, that changed a lot for me, and changed a great deal. Then as you develop each team, as each team sort of gets to 500,000 or 600,000, each team will have its own challenges as well. So, not everyone's different like a robot. Different client managers have their own personalities. Then as the leader, you can help them overcome their own challenges as well. 

But a lot of the things that Ed taught me, were out from the book called The 7 Habits of Highly Effective People by Stephen Covey. That's a great resource we've really taken. In a couple of other books, we've made it. Ed's made it fit for Wize Mentoring and helping people. 

Thomas Sphabmixay: I really love these seven divisions because not only does it show you the different modules that are needed to build up a Wize firm. It's also the things that aren't here that are important too, that Jamie, that you might often see in other accounting firms. They might set up like an IT department or some sort of funky department and funky roles and all of us. All of a sudden they're saying, ‘Where's my profit going?’ 

Jamie Johns: This is like a ladder. So these seven steps slightly, we've been calling these 7 steps to freedom. It's like a ladder. These are like the backbone. Those seven steps are like the backbone. That's a great graph. 

Years ago, a true story Ed might remember. But I said to Ed, this is many years ago now. ‘Ed, how do I move from my firm?’ Then Ed took me on a journey and he actually said to me, ‘I think on the phone.’ Then I got a graphic designer, Ed, you might recall to draw this up, but I remember you say, ‘Jamie, you remove yourself from an admin first, that's really easy.’ You can get someone else to do admin. So I thought, right, that's a good point. I'm gonna list all the admin tasks and get someone else to do them. Then, the next was production, and so away we go production, and then managing that was more tricky again. So you can follow all those steps down there, everyone, and that's exactly how you do It. 

Thomas Sphabmixay: Yeah. And, something to point out, Jamie, is that perhaps every firm's withdrawal journey might not always look the same, but definitely, admin is one of the simplest and easiest to be able to get ourselves out from. 

Jamie Johns: Yeah. 

Thomas Sphabmixay: Some owners come to us and they've already been out of production, so they don't need to do that. But they have a huge challenge trying to get someone else to manage the clients. 

Jamie Johns: You've gotta be realistic too, Thomas. Like while everyone's got really, really clear goals here. But the road's a bit windy. That's just life. You'll have staff leave, you'll have some clients leave, you'll have all sorts of things that will go on. So I couldn't sit here and say to everyone, ‘Oh, look, your road's just gonna be like straight and fast.’ So, that's the challenges that you're put through. But that's why when you're under pressure, you'll go from a piece of coal into a diamond. That's what Ed telling me. 

Ed Chan: Yeah. So there's no way to get to a diamond unless you're put under pressure, stress, and heat turns stressed and pressure turns you into a diamond. What doesn't kill you makes you stronger. 

But I just wanted to say that the smaller you are, the more you have your foot in each of those roles, in each of those divisions. And even your staff might hold three of those divisions and/or four. Then as you grow, you then withdraw from some of those boxes. Sometimes, you might find someone that can do both sales and production. Then you've gotta make a decision as you grow to either they go out into sales or they go to production. But they can't do both. So there are crossroads where you'll get to and you'll go, ‘Okay, which direction should I go?’ You've gotta make those decisions, but you can't do both and. Do it slowly. Do it within your cash flow and your financial commitments, and don't do it too quickly. But, that's the journey. The journey is to withdraw from the lowest cost person in the organization first because you are the owner of the business is the highest cost resource. If they're doing the lowest value task, then you're not being efficient with your time. So you've gotta constantly think like that, ‘What can I replace myself with and who can I bring in to replace that task?’ And then step by step, you withdraw from the tasks. 

Thomas Sphabmixay: That's an excellent action point to be able to take away from this Ed, is to be able to think consciously about what could be withdrawn. 

Jamie in the WizeHub, there is a great activity also around the quad activities owner's sheet as well as the quad activities senior sheet. Basically, being mindful about identifying all the activities that are on your plate, and then asking the question, ‘Is this something I should be doing in the long term? ‘Or is this something I shouldn't be doing in the long term?’ 

Jamie Johns: Yeah, that's right. 

Thomas Sphabmixay: Finding the right divisions to plot them into. 

Jamie Johns: Exactly, Thomas. 

It's a great task to do just to list everything you do. List every single thing you do every day, every week, every month, every six months, every quarter, and every year. Then you just sit down and determine whether that's Quad 1 or Quad 2. Quad one is urgent and important, but as a firm owner, you ultimately want to get into Quad two, which is not urgent and important.

The ebook we've got is called The Accountants 20-hour WorkWeek Playbook. That's an absolute classic. That's a really good resource. There are different ways of saying different things. There's another little file in the WizeTribe Facebook group, Thomas, under the files, it's called a Time and Task Order. I don't know if you've ever seen that one, that's just another way of saying the same thing. But if you have a look at that, everyone, the time and task audit, it's just the same thing. It goes through just like Ed said, ‘What's the lowest cost thing that you can list in your time and task audit? Should you continue to do it? Should you delegate it? Should you start doing something else and stop doing something else?’ So there are just different ways of saying the same thing

Thomas Sphabmixay: Exactly right.

Are you working IN your business or ON your business?
What are the barriers to growth and how to overcome them?
The importance of leadership
Wize 7-Division Org Chart
How to take action