Episode 114: Critical Policies For Instilling Better Leadership in your Firm

Do you want to become a good leader for your team?

In this week's episode of The Wize Guys Podcast, Brenton Ward with Ed Chan and Jamie Johns will discuss the critical policies that will help you set up your business for growth. 

Remember that if you don't show leadership, then everything falls apart. You want your business to run from the bottom up instead of the top down, and to make that happen, every team member should be the leader and show leadership in their respective areas. But how do you become a good leader? And how do you teach leadership to your staff? Tune in to today's episode to learn how and more!

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Transcript

Wize Mentoring: 0:02

From Wize Mentoring is The Wize Guys Podcast, a show about accounting and bookkeeping practice owners and the many stories, lessons, and tips from their experience of transitioning from a time-poor practice to a business that runs without them. I hope you enjoy and subscribe.

Brenton Video: 0:23

To kick things off, I want to talk about one of our favorite topics, the topic of leadership, Ed, arguably one of the things that we need to be focused on most as owners of our firm and leaders of our firm, but kind of opening the conversation up around specifically what critical policies we need to instill into our firm to create a better leadership culture and to instill leadership into the business. So, before we get to some of the specific policies that we wanted to talk about today, ed, I want to start with you and get some general observations in a second.

Ed Chan: 0:59

Thanks, Brenton. Yeah, so leadership is quite a sort of a term that people use, but what does it actually mean? What is it? And you know how do you apply it and how do you get it. You know why some people are leaders and other people are followers.

Ed Chan: 1:17

It's so important that you can have the best systems in the world. You can have the best people around you in the world. You can have the best people around you in the world, and if you don't lead them and you don't show strong leadership, you are apart. We talk about this in Wize that we want the business to be run from the bottom up, not from the top down, and what's important in getting it running from the bottom up and not top down is that every single person in the organization is a leader and to show leadership in their respective areas. Jane thing falls apart. Whether it's mom and dad is the leader of the family, whether it's the church community, whether it's the company the CEO of a company, whether it's the leader in you know your play group or whatever, or you know the leader of a country, if you don't wrong leadership, everything falls apart will talk about this a bit later on, about you know leading yourself and then leading others. However, just from a very broad, high-level point of view, it is about everybody in the organization doing the right thing, taking responsibility not just for themselves, but for everything around them.

Ed Chan: 2:42

And often you can see the followers from the leaders. The followers say things like you know, it's quicker if I just do this myself. They'll say things like by the time I've trained someone else, I could have just done it myself. And often they're more interested in you know, being right rather than having the right results.

Ed Chan: 3:05

The leader, on the other hand, is someone who's focused on outcomes. He's not she's not focused on their own ego or being right. They're focused on the right outcome for the organisation, for the people that they're leading. They're always not taking any credit for themselves, but they're trying to prop up other people, make them be the best that they can get, the best outcome from the people that they're leading. And you can see these because they're selfless and they don't talk about themselves. They just talk about their team, how good their team is, and their whole agenda is to get the best out of the people around them. And you can see where a person working for a manager a or he's working for manager B. He or she seems to work better under one manager than the other manager and it's the same person, but under different leadership they perform differently. So just to start us all off, that's my interpretation of leadership.

Brenton Video: 4:08

Yeah, that's really interesting and, I think, an important thing to note here is the journey of it, so I'm assuming that you're a different leader from when you first started your business. Now you've had a good in terms of timeline of experience, but you also invested heavily in becoming that leader that your business needed you to be in order to grow. Can you talk to us a little bit about your personal journey of investing in your own leadership?

Ed Chan: 4:35

Yes, absolutely Initially.

Ed Chan: 4:39

All of us grow up if you like inverted commas by starting off by being a follower.

Ed Chan: 4:45

You've got people that are leading you and you do the work and you're focused on getting the work out, doing the work, and your mindset is around getting control of the work, getting the quality out, and so forth.

Ed Chan: 5:02

But then, as you start to hire people, I had to evolve my skills from doing the work to actually managing the people around me, because where you get the most leverage and return on investment is to people that are working around you to be the best they can and to produce the most they can and to keep the good people with you, because often people leave they don't leave firms, they leave their managers and unless you develop those skills of leading people and managing people, if you get a lot of churn in your organization, it's a huge, huge cost to your organization.

Ed Chan: 5:43

So that changed your focus, and where I am today there's about 160 staff, but where I am today is I'm just constantly looking for really good people and training them and inspiring them and getting the best out of them so that they can be the best that they can be, and my role is obviously and Jamie will tell you the same. Yeah, his role is changing over time, and for the people who are listening today, whether you're a client manager or you own the business, if you want to scale your business and you want your business to be successful, you have to develop leadership skills.

Brenton Video: 6:24

Okay, it's a great point. It's good to bring you in here, Jamie, because leadership is, I know, one of the topics that you're very close to and you're very passionate about because it's been a journey for you as well. Uh, since working with Ed and also the other coaching experiences you've had over the last decade in building Sky, talk to us a little bit about your leadership journey in terms of what importance you placed on it at the start of growing Sky and starting your business and what importance you place on it now.

Jamie Johns: 6:57

Yeah, look, when I started out, it was all sort of just, I guess, a focus around getting the business launched and getting started. And you know, like everyone and the same as Ed, I just went flat, chat, you know, doing the work in that production area and really got to the classic point of about 600K to a million in fees. And that's where a transformation has to take place at around about that, those two sort of barriers, and that transformation is what I sort of call from being client fanatical and then moving across to being team fanatical. And I think you know, as Ed's mentioned before, you know, 80% of businesses go broke in the first five years, and other stats we've all heard that only 4% of businesses worldwide turn more than a million dollars. So the question then is why?

Jamie Johns: 7:53

So there are these barriers there, and one of the biggest barrier to the firm owner is obviously this leadership aspect and then having the knowledge and then having the strategy to know how to scale that. And that knowledge and strategy is, all you know, tied up in the leader. The leader has to transform from doing the work to managing people, and that was the journey that I went on to stop doing the work and then to managing people because we're in the financial and taxation and bookkeeping industry, but from where I sit I'm in the people business. So if you want to scale your firm, then you have to be able to learn how to articulate leadership skills, and not, importantly, just the what, but how you go about it as well. And then, once you articulate those skills and become the leader, become the manager, then you can continue on that journey.

Brenton Video: 8:53

But those skills must be learned and you can learn them was there any particular part of that journey, in that transition and developing those skills that you found quite difficult or that you sort of really grappled with yourself in order to overcome?

Jamie Johns: 9:08

It's a really good question and Ed, sort of as my mentor, helped me recognize that and which I know. You know, I would often say to Ed you know, how can I be better and what am I doing right, what am I doing wrong? And you know, I think I was okay at leading myself. I was motivated and sort of trying to have the private victory. I was a very friendly sort of person with all the team and that crew, but I felt let down on myself that we weren't getting the results, the KPIs that we needed. And Ed said to me one day well, Jamie, it's okay to be friends with everyone, Jamie, it's okay to be friends with everyone, but you've got to go up a level above that so that you know people are productive and you get the results you need. And so you sort of get these three areas. If you're weak in one area, you have to work on that one particular weakness as a leader. We'll talk a bit about more of that in the next slide as well.

Brenton Video: 10:02

Yeah, absolutely Anything to add to those comments. Were there any particular barriers in terms of developing those leadership skills that you noticed working with firms that they really struggle with? They're coming back to you, trying to get you back on how to overcome more often than not.

Ed Chan: 10:19

Yeah, I mean, if I started, if I wanted to explain that in a way I can explain it from my own point of view. It requires a lot of patience because I'm impatient, aren't we all? It's really clear to me Do it this way and the result's there, but often people cannot see what you can see. And just on a point, what Jamie was saying earlier about friendship as a leader, you've got to make some tough decisions and I remember saying that exact thing to Jamie is that if you get too close to friendly it's got to be aligned then you can't be objective with your decision- making process because you've got to look at the welfare of the company first, or the business first, and the welfare of the individual, because if you can't separate the two, then it would be very hard for you to make those kinds of decisions.

Ed Chan: 11:18

That requires, you know, some hard conversations with some people to move some people on. When you become too friendly with them, then the lines are blurred and the company suffers for it. And the company represents everybody and it's not just one. The majority has to come first and being too friendly and too friendly with everybody, you know, makes it a bit hard to be objective in making these decisions. So, yes, you can be friends with the people that you lead, but there is a line that you cannot otherwise, you can't be objective, and the welfare of the company has to come first and you've got to be able to make those objective hard decisions and hard, you know, for the welfare the company that's a really good point, ed.

Brenton Video: 12:06

Um, if you don't want me touching that one a little bit more, especially in that initial growth phase, when you get your first couple of staff on and first staff are coming in. I think I even struggled with this myself when I first took on my own staff, making sure that they were, you know, feeling like they were part of the business and making sure that they stayed and that they were happy. And then I think the thought process is, if I am overly friendly and do become friends with them, they will be more likely to stay, which is just not the case. Is it there?

Ed Chan: 12:41

You do have to plan that line yes, you just got to have that line because often if you don't lead the wrong, people will take you down the wrong path. And I can very use an example. And for those who are listening, if you're an owner, the message is obviously clear. But from a client manager point of view, a senior client manager point of view, it also applies because you're managing your staff and you know there is this line and you have to make the hard decisions.

Ed Chan: 13:17

Just very quickly, I had this particular client manager who is very close to his staff and unfortunately, he wasn't able to make those kinds of hard decisions because they were very friendly, you know, their families knew each other, and so he couldn't make the decisions that were required. And typically what happened was there was two staff and they were both very good friends with him and they couldn't do the work. So this particular person would say, well, leave it on my desk, I'll finish it off for you. And before you know it, you know this particular client manager had a ton of work to do and the two people that were supposed to be doing the work were just sitting around not doing anything, and poor old, this poor old guy was just struggling and because he's just, he couldn't make the decision to move the line.

Ed Chan: 14:05

Now, long story short, he left and we had another manager come in to take his place. After the first week, she said these guys weren't producing and she moved them on and then she replaced them with somebody two others of her own and she went from handling about 300 grand in fees to today about 900 grand in fees because she was able to blockage down the bottom and she was able to do that. She was able to make those hard, tough decisions by not being too close. It's got to be productivity first.

Brenton Video: 14:44

That makes total sense. So, guys, I wanted to get into Jamie I wouldn't mind if you lead the conversation on this setting the context for, I guess, the overarching areas of leadership that we look to focus on and what's required of our leadership skills within the business and outside the business. But then, once we've got a bit of a handle on this, looking at some of the finer policies that we can start to implement this year that really help these three areas take shape. So can you take us through these three key areas of leadership?

Jamie Johns: 15:18

Yeah, thanks, Brenton. Look, basically, Ed's often said over the years that a firm is a reflection of the owner, and one particular circumstance might be where you've got a firm owner and they've got some staff, and if a firm owner isn't a good manager or doesn't learn the leadership skills, they'll tend to do everything themselves. So they'll tend to be able to, they'll be very high productivity, they'll really keep the work in themselves, they won't be that good at delegating, and what happens is that they really hit this first barrier of roughly 600K to a million. So they're good at letting themselves in, good at getting results themselves, and so you've got that particular scenario. And so you've got that particular scenario.

Jamie Johns: 16:07

You know, the next type of scenario is you might be good at leading others and Ed touched on being too friendly with others and you might be even inspirational to others, but then you know this was probably my fit that I failed to hold people accountable, I failed to set systems in place around accountability and results, and so you get a reflection of a firm, of someone like that.

Jamie Johns: 16:30

And so the last point there is leading the business is really the third pillar if you can be good at leading yourself and good at leading the others.

Jamie Johns: 16:39

The second point, but the third pillar, is having the ability to bring that team to get results as well. And if you incorporate those three pillars and have those three things working together in combination whether that's a sporting team or your practice, your accounting or bookkeeping practice that is the key and that's the synergy, and that's where you'll get you know, you, you'll inspire to lead others. Their productivity is great, you'll get good results and you'll be really good at leading yourself. But as soon as you sort of drop one of those off, you get anything that's less than what the vision should be of how a successful firm should run. And you know from those three pillars in Brenton we go into well, what are into well, what are some of the things, what are some of the leadership policies that we use, that we educate ourselves and educate the leaders underneath us, and our entire teams of you know how to implement these ideas of how to go about it.

Brenton Video: 17:41

Absolutely, and just touching on these three points here, once these were made clear to you, were there any obvious gaps in what you had implemented or the leadership skills that you kind of identified within the business that you had? And you've since worked on bridging those.

Jamie Johns: 18:01

Yeah, there were heaps of gaps. I'd never heard of the no- bypass policy. You know I'd had a team. If you don't have a no- bypass policy, I was undermining some of the senior staff and not knowing that I was doing it. I was friendly but I wasn't keeping people accountable. You know, I didn't have, say, the daily huddle meetings, I didn't do the weekly tactical meetings, it was all just sort of thrown together and I've got to this point but where to now, and you know quite literally, I just didn't have the knowledge that Ed had and then just went on that journey to incorporate it in. And, to be fair, I don't think you know whether we go to school or university, how many of us are taught managerial skills? Are we taught leadership skills? I know I wasn't and Ed sorted this self out for himself with books and whatnot. And I think Ed's comment was the other day well, a lot of it's common sense. Unless you think of it and implement it, then you won't get the results you're after.

Brenton Video: 19:10

Absolutely, and, ed, throw it to you. Looking at that, there we're talking about leadership as a whole and now we're talking about leadership in three different areas. The whole conversation of becoming a better leader can be somewhat overwhelming, especially if you're putting yourself out there and being the people. A person isn't something that's kind of close to you or in your comfort zone. So how do we approach this in terms of simple steps towards becoming better leaders in these three areas? Do you think?

Ed Chan: 19:44

You have to start with yourself. Someone's said that don't try and change others, try and change yourself first, and that's easier said than done. A natural state is that it's everybody else's fault, not mine, and you create this, it's everybody else's fault. Then you can't change things unless you change yourself first. And the biggest thing for me was to focus on one thing and one thing only. It's about solutions and outcomes. That should be the focus of all your decision making. And I'll just give you an example.

Ed Chan: 20:23

We had an incident here the other day where there was a mistake made, a problem made and our wanted in our marketing team. This particular person said to me oh, it was, you know, Jack's fault. He caused the problem. And my response to him was that I really, care whose fault it is, I'm not interested in whose fault it is, let's just find a solution. How do we fix it? So if you focus your attention on the solution, you'll find solutions. But if you look for problems, then you'll find those as well, and if you look for excuses, you'll find those as well. So look for solutions. That's the one single. It's the simplest advice I can give you, which has helped me a lot. So whenever I'm in a particular situation, I just focus on well, how do we fix this? I don't care, we get it, let's just fix the problem.

Brenton Video: 21:22

So if you use that one single thing, and that's going to help a lot, so I think some of the policies that we want to talk about, Ed because the first one that we've got listed that we would suggest implementing and starting to live is that no blame culture or the no- blame policy. So can you extend on the sort of definition of that and how that comes to life in the firm, based on what you were just talking about there?

Ed Chan: 21:50

Yeah, absolutely. If you create a blame culture, if you're looking for a person to blame, then you create what's called a scarcity mentality within the organization. Everybody will just go hide. They won't come out and tell you what the problem is because they're afraid of getting blamed for it. And if you don't know there's a problem because everyone around you is hiding the problem, then you're not going to be able to fix it.

Ed Chan: 22:19

And in Australia, we have this thing about, like when I coach firms, we prepare a survey with clients and a lot of firms say, oh, we don't want to ask the client's feedback because they might tell us something we don't want to hear, whereas in Japan they want complaints. The reason why they want complaints is because they have this attitude of kaizen of continuous improvement, and you can't improve something unless someone complains about it. But I think the reason why it's manifested in this way is because we do have this blame culture. We also have this thing called a tall poppy syndrome, and the blame culture that's prevalent in organizations creates this scarcity mentality, whereas it should be an abundant mentality where everybody is fine with making mistakes because it's a learning experience, as long as we all focus on the solution. I've never, ever blamed anybody for making any mistakes, and sometimes they're so upset themselves. I do the opposite. I just encourage them out. It's just a learning experience, don't worry about it.

Ed Chan: 23:33

And if you create that kind of abundant mentality, then everybody will be open and free with their problems and their concerns and their you know things that have gone wrong, and everybody works together to find a solution. So it's a much, much better environment to create, and that's created by the leaders of the organisation. There's a saying that the fish stinks from the head down. Whatever is down in the organisation is created at the top. And when I say leaders, I'm talking about everybody. I'm talking about not just the clients. I'm talking about the client managers, the assistant client managers, and senior production managers, all throughout the organization should not have a blame culture. Just focus on fixing the problem and you'll see the whole culture change.

Brenton Video: 24:24

And Jamie, feel free to add your contribution here. But I mean, I see this very much as a cultural thing. It becomes part of the DNA of the firm. It's not specifically a step-by-step policy that you can follow if you like, so gross. How do you actually practically implement this into and ingrain it into the culture of the firm? Are there any suggested simple steps? Because it's one that is can be quite confrontational that having to say to someone that's no, we don't say that. How do you approach this one?

Jamie Johns: 24:57

if I could just make a quick comment.

Jamie Johns: 24:59

And then, Ed, but one of the things I found, particularly with making changes in your firm, to improve.

Jamie Johns: 25:06

And you know, often when you make changes things will go wrong, you know, because that's just the nature of change.

Jamie Johns: 25:13

But what some people do, what some leaders do, it's really easy to focus on the 5% or the 1% of a mistake that may have gone wrong on a new system. And people tend to and I used to do this say, well, let's go and change that whole system, or someone's made that mistake, so let's go and change the rest of the 95%. What I found was that's really poor leadership because I would forget the helicopter view, I would forget to step back and sort of look at the facts and say it's only 1% of clients or 5% of clients. And so because what sort of tends to happen is if you go and make that change to the whole system, you can be inadvertently blaming someone for making that mistake. So just be aware that if mistakes happen when you do make changes, I guess it comes down to what they call the 80-20 rule. You know it's very easy to focus on the 20% or the 5% and then change the 80% and throw the baby out with the bathwater, as they say, and I used to do that.

Brenton Video: 26:19

Absolutely, Ed anything to add to that.

Ed Chan: 26:22

Yeah, that's very true. I mean, we had an incident the other day here where a client complained and instantly our marketing manager started to prepare a policy to change the whole thing. And my first response to him was how many complained? And he said one and nine thousand clients. And I said we had one client complain and I think the clients. That's perhaps not educated or misunderstood. Let's just spend time educating him and explaining to him how it works, rather than change the whole thing, whereas the other thousands of clients are happy with what we're doing.

Ed Chan: 27:07

But it's not easy. I mean, I'd be silly to sit here saying to you oh it's really easy, it's not easy and for us, we've all got different personalities and some of us are more volatile than others and react too quickly, and so forth. But you know, but it's got to start from yourself because you've got to lead by example and the worst thing is you say something and do the opposite. That is the absolute as a leader, everybody's watching you, and if it was easy, easy, everybody would be doing it. But it's not easy and I'm constantly. I work, as I was saying. I work harder on myself than on the other person and I'm a person, I've got feelings and I don't think I'm a natural leader, so I work harder on myself.

Ed Chan: 27:59

I constantly work on myself with these things and if you're an emotional, reactive kind of person, there are different techniques that help you.

Ed Chan: 28:06

You could count to 10 before you say anything. You could say I'll come back to you on that, just these buffer zones, because often the language that you use hurts quite a lot. Could say, I'll come back to you on that, just these buffer zones. So you know, there's often the language that you use hurts quite a lot. And, for example, if someone's made a mistake and you say you've made a mistake, the word you are cutting, it's personal, so think about the words you say. You'd say things like oh, it's a better way to do this. So I constantly work on those little things because your communication is so important. This is the thing that we have over everybody else is our ability to communicate, and you can do it poorly or you can do it extremely well, and as leaders, we need to work on that and I think there's a section further on about communication. But those little things that you've got to work on the I'm busy culture.

Brenton Video: 29:04

Where does that fall into it? I feel like it falls under the umbrella of the blame culture because I'm experiencing quite often at the moment in the advice business of doing some consulting with and it's I'm so busy, I'm so busy, I'm so busy, and then that leads to blame because I'm so busy. Do you experience that and how do you deal with that directly?

Ed Chan: 29:26

Yeah, I had the exact same thing. I had a new marketing manager start with us and he keeps saying that he's too busy. And I said if you're not too busy, everybody's got the same amount of time. And the reason why some people are so much more productive and get through things and get so much done than others is because they prioritize, they know what's important and what's not. And I used an example and I said if I said to you there are a million dollars on the table here and all you've got to do is to do the thing that I've asked you to do, which you said you were too busy to do, then all of a sudden your priorities change and you put that right at the top of the priority list. So don't tell me you're too busy, tell me how to prioritize what you're doing. So it's a question of priorities. We often use excuses because that's an easy one I'm just too busy, like we're all busy, we've all got the same amount of time.

Ed Chan: 30:25

Then why do some people achieve so much more than others? Is because they know what's important. And we talk about the quadrants in the past. They know working in quadrant B and not quadrant A. And I have firms say to me you know, we started out together, we're about the same size and now you're so much bigger than I am and I'm still working in the business and you've stopped working when you're 38 in the business. You know what did we do differently? We had the same amount of time. It was just that I worked in Quadrant B and they worked in Quadrant A, and it's just a matter of prioritising and spending your time in the right area. So, as leaders, we need to spend time on training others, inspiring others, educating them, and you get a lot more leverage out of that and you achieve a lot more than doing it yourself.

Brenton Video: 31:14

Perfect, great answer, thank you. Did you want to add something there, Jamie?

Jamie Johns: 31:19

I was going to just add another comment about developing leaders and for everyone listening, one tool that might be helpful and I did do this for about a year, about four years ago was keeping a weekly or sometimes monthly journal, a leadership journal, and I would just jot down over the last month. You know what went well, what didn't go so well and you know why did it go well or why didn't it go well. Could have I changed my approach, I think Ed has a big quota of this is, I think self-awareness of how you come across, and how you have an impact on others is a really big ingredient to a successful leader. So I just wanted to add that level of self-awareness I found with the Leadership Journal, just reflecting on the last week, and reflecting on the last month, did help me become a better leader in the long run.

Brenton Video: 32:15

Absolutely. I think that's so valuable, such a valuable exercise, because it gives you an opportunity to stop and reflect on that and then reflect on the journey that you have gone on because we often don't take the time to do that, so that's a great exercise. Jamie, you mentioned before, that part of your journey was you didn't know to not bypass your team, and so that was quite a bit of a challenge for you to get over. So can you. We've mentioned this in the past in certain conversations, but can you talk us through the no bypass policy, how it works, and the steps people can take to implement it?

Jamie Johns: 32:52

Yeah, yeah, sure, Brent, Ed's probably the master at this one because he taught me that basically, if you don't use the no bypass policy and I've also had the management theory call it direct line reporting. I never really understood what it was until Ed explained it. But basically you can see, there we've got the wise, ideal team and at the end of the day, the senior client manager shouldn't bypass the senior production manager and direct or instruct the rest of the team, because if you do that, you're only undermining that person. Even if we go a level higher if we've got firm owners listening and I know some of you are working on and making plans to put a senior client manager in place Now, once you've gone through the process and it's a gradual process to putting a senior client manager in place if you don't use the no- bypass policy and you continually talk to the clients or continually talk to the team, you're only going to undermine their authority, you'll undermine their accountability and it'll just create confusion.

Jamie Johns: 34:00

And I've been through this. It helped me over the years. But when I removed myself slowly from the business, if I kept instructing the clients, telling the clients what to do or the team what to do, it just created confusion because then the senior client manager or even the senior production manager was just out of the loop. So you get all this confusion. Brenton, and again, a firm will be a reflection of the owner. So if the owner shows really good no- bypass policy skills and implements that, then the firm will run smoother, and the communication lines will be better. But if you don't have the no bypass policy in place then it can end up in chaos and no one knows what they're responsible for. So Ed might turn a bit more.

Brenton Video: 34:47

Ed anything to add to that?

Ed Chan: 34:50

Oh yeah, I often get firms say to me, oh, I wish my staff would take more responsibility for the clients. If it all comes back on my desk and on my shoulders. shWhen I observed them operating, I said to them you've asked your senior client manager to be responsible for the team and you've asked the senior client manager to be responsible for the clients. Why do you undermine him or her constantly? And he has said to me undermine, I don't do that. And they do it without knowing that they're doing it. I mean their heart's in the right place because they want to help out. So in this diagram, as an example, the partner would go down to the counter the blue person, the blue person in the diagram, and start giving instructions to the person and say look, I've got a client, Jim, he's got a bath, it's got to get done really urgently and he goes to the senior accountant the blue person and gives him the job to do and bypasses the senior client manager the orange and the green and goes straight to the accountant. And then, if you constantly do that, eventually the senior client managers will say well, if you want to manage the staff, you manage them. I'll sit back and watch them Because you tell me to manage them but you just keep undermining me, you know, and my authority. So what authority will I have with them?

Ed Chan: 36:19

Having said that, I want to be very clear that the no- bypass policy doesn't mean that the partner can't go and talk to the team, like the senior accountant and the bookkeeper.

Ed Chan: 36:31

The senior accountant and the bookkeeper bypassing policy is simply about not giving instructions to them, except it needs to come through the senior client manager and the senior production manager, the green and the orange.

Ed Chan: 36:43

Now, of course, you can go talk to them. I go talk to my staff all the time and I say things like you know, how are you going, any problems, any blockage to production? And if one of the blue people just so that it's easy for you to look at it says to me, oh yeah, I've got this problem, then I don't give him or her the answer. I go back to the senior client manager or the senior production manager and I say we seem to have a blockage to production here, and then I give them back to that person to resolve and I might even give them a bit of a tip'll say look, you know, maybe look in this area or do it this way and that should fix it, and often you know the three of us will be in the room and we talk about it, but you don't undermine the people that give an authority to get the work done.

Jamie Johns: 37:29

I agree 100% with Ed and just a couple of practical circumstances. You know being through this probably more recently with Ed and just a couple of practical circumstances, being through this probably more recently with Ed. But once I'd gone through the process and I'd founded the firm and met all the clients and handed over the work with the emails, I used to bring the senior client manager back in and say hi, Joe, you met Ash the other week. Ash, what do you think about this particular circumstance? And it provided you're timely and responsive. You know, ash, you know you get the senior client manager answer and then they get the communication lines flowing, and even the same with phone calls.

Jamie Johns: 38:05

Sometimes a client would call me and I'd do a conference call. If everyone knows how to do a conference call on your iPhone, then I would just get a conference call and say you know, hey, Paul, I've got Joe here, met the other week. What do you think about this? And that might only be the 20% of the clients who just need more education. And again, you're not bypassing them, but you're slowly but surely bringing these people in the senior client managers and building that relationship. There are just a couple of little practical things that I did and after that, the clients are normally fine. Might take another go, you know one or two more goes, but that was just a practical way just to not bypass them and educate the clients and show good leadership.

Brenton Video: 38:48

I think it's an important point to note here is this policy specifically, as Ed mentioned before, it's not easy. It certainly wouldn't be the right thing to sit here and say that it's an easy one to implement and it doesn't happen overnight. This is very much a habit change that we have to instill in ourselves and then also help other team members instill in themselves and their team, so they don't set the expectation on themselves that this is something that you can implement and just it falls into place next week. Is that the case, guys?

Ed Chan: 39:25

Yeah, 100%. It will take time. And what Jamie said earlier is true 80% of the staff, 80% of the clients, once you tell them what it is that they can do it, the 20% will take longer to change their habits. So if it's a client, they'll keep coming back to you because it takes them longer to change their habits. But you've just got to persist and you've got to show leadership. And you've got to persist and you've got to show leadership and you've got to do this. And the staff is the same.

Ed Chan: 39:49

So 80% will say yeah, no problem, got it. And 20% will continue to bypass so that the grinder accountant down below, he or she will bypass the manager and go straight to the partner. And then you've got to find them, go through the senior production manager or take them down to see the senior production manager and the three of you discuss the problem. And my experience has been 80% will just follow it, 20% you've just got to work a bit harder. And then there'll be a handful, just a handful. That is just not possible to change their habits and you've got to decide something else with them. But the majority of us, and you've got to decide something else with them.

Brenton Video: 40:31

But the majority of the time, that makes perfect sense. So, Jamie, talk to me about the no triangles policy, because it's a really important one, one that can kind of be overlooked in terms of part of the leadership journey, something that definitely has to be implemented. Where did it come from and talk us through how to implement it.

Jamie Johns: 40:48

Yeah, look, Brenton, I first came across this from another leadership consultant, actually Rachel Robinson, and some of the viewers here might have seen Rachel present at Xerocon in one year. But in a nutshell, it means really just having, I guess, personal integrity and not talking about other people on your team about a problem or an issue behind their backs. Now that might sound really simplistic. However, it does happen, and when it does happen, you've got to have this tool or leadership policy to educate the people involved that you're always better off not creating triangles. Just go directly to the person. If you've got an issue or a matter to sort out, then go directly to the person. Don't create a triangle. You know I think we've all worked in different places over the years that you know we might see people having a bit of a chat around a corner and may not always be healthy chatter about oh, do you know what happened here? So-and-so said this and she said he said all this type of thing. So I think, as a leader and the leaders that you develop and lead your teams, it's really important that you just continually say and lead from where you are. Each person has to be a leader. So if someone comes to me and says hey, oh, Joe said this about me I'd say, well, you need to go and talk to Joe about that face-to-face, and sit down and have a chat. You know, don't send an email. We know what emails are like. You know, if something's sensitive, do not send an email. I've lost count over the years of how many bad emails I've seen sent to clients and sent internally as well. So it's always not what but how you do it.

Jamie Johns: 42:33

But in a nutshell, with the no triangles policy you know there are some points there, Brent, you've raised it. You know it increases the respect, it increases productivity. Ed and I've seen, you know Ed's even been coaching me for years you know a little issue pop up, that the wmail's been sent to the wrong client or something. We've probably all seen that happen. But then all of a sudden, 10 people are involved in this issue. You know there's a blame mentality there, or that person did it or she said so. You know you've got to cut all that out and it's probably a good point. I'm about to say that none of these policies stand- alone, in isolation. You've got to have each of these policies in place to create, you know, a fantastic culture, the overall culture?

Jamie Johns: 43:17

Yeah, absolutely. And again, you know leadership is creating a fantastic culture and I think I just put a post recently that you know, for quite some years now we've been tracking our internal culture and you know it goes up and down, up and down and you know finally it's up the highest it's ever been. So you know there are low points. So another policy just to implement and again, this is in the wise vault at that step to really delve into the detail. But I think everyone knows exactly what I'm talking about. There are those triangle conversations that don't need to be had.

Brenton Video: 43:53

It's like what I'm talking about is those triangle conversations that don't need to be had to say hey, Joe, just go and talk to him, don't talk to me about it. I'm here to help. Let's focus on a solution, absolutely, ed. Could you give us a run- through of the culture and comms policy, what it's about, and suggestion on where to go to implement it?

Ed Chan: 44:03

Yeah, sure, this is probably the most important, and I just want to start by saying a policy and all sorts of policies. Obviously, whenever you have an upset in an organization, 99 out of 100 times there's probably no rule or policy that's established. So when you leave a vacuum, it gets filled with the wrong things. So as soon as you create a policy or a rule, then it fills that vacuum with the right things. And the way that I work is an upset. It's a problem. Create a policy, educate everyone on the policy, and then calm comes back into your organization. So over time, the more policies that you develop, the more people are educated on the policies, the more the calmer your organization is. So I'll just say that as a background to what I'm going to say about the communication policy, and the communication policy is probably the single most important.

Ed Chan: 45:06

Just to give you an example, in our policy in Chan and Naylor, when the staff member starts with me, I send him or her our policy on communication. It says something like this it says if you get an email or a phone call, our policy is to return that email or phone call on the same day, and if you can't get a response on the same day, at the very latest the next morning. If you can't do that, then you get somebody else to respond to the person who said that email or phone call to you. The reason is that most problems occur because of miscommunication or non-communication. You can eliminate pretty much 90% of your problems by over-communicating rather than under-communicating. And we tend to under-communicate and not over-communicate only because we're so focused on ourselves and not the people around us. And you can get the culture of the organization and I created that culture by having the policy to sign off on it. And it goes on to say that if you don't respond in these time periods then you'll get a warning and then you'll get the sack. And I'm really really strict on this because we've got 160 staff and if they have a really poor response policy then your job is really, really hard. You imagine hundreds of people not responding and then you've got to go around and you know police and you know big stick and so forth. But if they all respond on the same day, how easy is your life? And then you can scale so much easier. And you know, often people can't scale because of a whole lot of things. But if your staff isn't responding then it has a domino effect and I'll talk about this.

Ed Chan: 46:59

You know the body language and the message you're saying to someone when you don't respond quickly. You know the body language is that you don't care about them. You've got other, better things to do. You've got other priorities in your life. They're really low on your priority list. It sends out all the wrong messages and the single most important thing I keep saying to everybody is that you know the other way that I grew my business and the one single thing was responding very, very quickly, and I did nothing as a rocket scientist, I wasn't anything like that. I just responded very, very quickly. And you guys have dealt with me now and you get really quick responses from me and that's just in the culture of our organization. I can do that instinctively, but it's just getting the rest of the crew, and the rest of the team doing it.

Brenton Video: 47:49

That's the challenge yeah, and it's one of those things that it's somewhat difficult to put in words as well. So one of the things we have done is we've documented that policy for you, which we put in the vault under step 16.6, and it's actually the policy that you've used in the past. We use it ourselves, Jamie, you've used as well, so we use it ourselves, Jamie, you've used it as well, so it's been tried and tested. Are there any comments you wanted to add to that, Jamie ?

Jamie Johns: 48:17

Sometimes you might get that you know I'm too busy to respond quickly. You've got to know how to answer those questions and part of that process is identifying the fundamental problems in your team or the teams that you might have and you know part of. You know what either way says and what we teach is to get that traffic flow right. And that takes time because when people say I'm too busy to respond, I don't get back to you in three days. That's normal because an underlying you know it's a symptom of a greater problem that the partner or senior client manager is taking all the production traffic or taking all the communication traffic from the clients and there's only 480 minutes in a day. So, yeah, they're going to have a buildup of 150 to 200 emails and I've had people tell me that they've got 200 emails in their inbox or 50 emails in their inbox, right?

Ed Chan: 49:12

Most of those emails, over 80% of those emails, didn't have to go to them.

Jamie Johns: 49:17

That's right, they've gone to somebody, Someone else yeah, that's right. So when you see those symptoms and if you've got those symptoms yourself, you know it's a trigger to say hang on, I've got to start putting in some wise teams and systems and policies and procedures, and it's just a symptom to a bigger problem.

Brenton Video: 49:36

I think that's a great point as well, in that everything that we talk about and the way in which we've structured the vault and the process in which we go through everything's interconnected. You can't have a robust and highly integrated culture and communication policy if we haven't got our team structure and our traffic flow right, because they're going to work against each other, so everything kind of works in unison and flows together. So I think that's a really good point to touch on and a great one. To finish on Any parting comments from you guys, ed, start with you.

Ed Chan: 50:14

Yeah, it's not easy. Don't think leadership is easy. It is hard and you've got to work harder on yourself than on the other person and if you take that attitude, then you will progress your career in that leadership area. Excellent, Jamie.

Jamie Johns: 50:31

Yeah. The only other comment I'd make is, as you go on this leadership journey is, situations will arise where you'll get an email or some situation might occur where you think it needs an instant response. My advice is don't do an instant response. Sit on the issue or the problem, have a think about it, for, you know, sleep on it. If it's not a problem or issue that has to be solved like instantly, Ed's always said to me how many times have you said I'll sleep on that, you know you'll calm down, you might be worked up, I know in my case. And then the next day, you know I'd say you know what. This is the way to approach this. This is the way to work toward a solution to this issue, but I think it's a habit.

Jamie Johns: 51:17

One in Dr. Stephen Covey's book is, I can't remember it, but it's proactive, I think. But he always says to create a space between the stimulus and the response. And I think, good leaders, 90 of things. You don't need to make an instant decision. You know my probable fault over there was always. I think Ed used to say Jamie's always, actually, I'll just do it, but nah, you're better off sleeping on it and then finding the best approach and how to go about it and your leadership will be so much better, and calm. And you know the mythology in your leadership will be so much better and calm and you know the mythology in your leadership will be better and more consistent and calm.

Brenton Video: 51:55

Guys, thank you very much for sharing today for everyone listening. Leadership is such a broad topic and we completely understand that, so it's often hard to understand either what to focus on first or what it actually means to develop those skills out. So, that is why we wanted to really touch on these couple of policies today, which will really, I think, point you in the right direction and help you start to really build a robust leadership culture within the firm. Guys, thank you very much.

Wize Mentoring: 52:26

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