The Wize Way

Episode 87: New Year's Resolutions & Finding and Keeping Great Talent

• Wize Mentoring for Accountants and Bookkeepers • Season 1 • Episode 87

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In this week's episode of The Wize Guy's Podcast, embark on a transformative journey as we navigate the realms of self-leadership and meticulous business planning to set the stage for the New Year with Brenton Ward and Ed Chan.

Discover why New Year's resolutions may fall short of being the silver bullet for success and explore how a robust business plan can serve as your guiding light. Also, delve into the intricacies of staffing in accountancy, from leveraging diverse skill sets within a team to strategically assigning clients to staff, fostering client satisfaction, and boosting team morale.

Don't miss the actionable insights on why investing time in staff training is beneficial and essential for your accounting and bookkeeping firm. Let's guide you through the strategies and practices that have the potential to elevate your accountancy business to new heights this 2024!

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PS: Whenever you’re ready… here are the fastest 3 ways we can help you fix and grow your accounting firm:

1. Download our famous Wize Freedom Strategy Map for FREE - Find out the 96 projects every firm owner must implement to build a $5M+ firm that can run without them - Download here

2. Need to Hire right now? Book at 1:1 FREE hiring assessment with our WizeTalent recruiters to help find your next best employee locally or offshore – Click Here

3. Book a 1:1 Wize Discovery Session – Spend 30mins with our Wize CEO, Jamie Johns, a $7M firm owner who is ready to give you his entire business plan to build a firm that can run without you – Find out more here

Ed Chan:

You've got to master leading yourself. So that's about self-discipline, that's about experience, that's about controlling your feelings. So you've got to lead yourself.

Wize Mentoring:

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-pull practice to a business that runs without them. I hope you enjoy and subscribe.

Brenton Ward:

I just want to say a big happy new year to everyone. Thank you for joining us early on in the year. I hope you're refreshed and recharged I surely am. I had a nice relaxing break over Christmas and I just want to say a big happy new year to you, Ed. How are you?

Ed Chan:

Yes, I'm well, thank you, and Happy New Year to you and to everyone. And yes, had a great break. Just spend a time recharging and catching up with family, and all that's good stuff.

Brenton Ward:

Now you'll notice that we're missing one of the good- looking Wize mentors, Jamie Johns. He's having too much of a good time on holidays. I guess I wanted to talk to you, Ed. It's an interesting time of year because at this stage we're in a new year, we're in a fresh start, and sometimes we seem to lead ourselves a little bit astray with the excitement of setting new year's goals and kind of getting wiped in the slate clean and getting onto a new track and focusing on different things. So I wanted to start the session by asking you, based on your experience, how you view the new year and this whole topic of New Year's resolutions and how that's fared for you over the years.

Ed Chan:

Yes, I know a lot of people do have New Year's resolutions, but I don't. I've never had a New Year's resolution. I always know exactly what I need to do. So it sort of stems from the business plan that we do and in the program itself, in the 18 steps, the first couple of steps involve a discovery session and there are some tools there to develop your own business plan. If you want to do that. Based on that, then I know what the rest of the year is planned out for me to do.

Ed Chan:

Then I generally run two task lists, and the first task list is what I call my P&L stuff, whereas it's putting out fires, and getting things done that are easy to do. A second task list, which is more what I call the balance sheet stuff, is the investment side of things not investing in shares or anything like that. I'm talking about investing in your business. I go through both task lists and I get the things done that I can get done in the first one to put out fires, and then I work on the second one, which is. Dr Stephen Covey's important but not urgent. For example, training someone is important but it's not urgent, and often we will say, Oh, it's quicker if I just did it myself. Which is quadrant A, which is important and urgent.

Ed Chan:

If you read his book called Dr. Stephen Covey, 7-Habits of Highly Effective People. He says that very, very effective people work in quadrant B, which are tasks that are important but not urgent. So my second task list is to do with things that are important but not urgent. Training someone is an example. Training a client, developing some systems, getting a checklist, and a design is important but not urgent. So I go through my task list and I'm always trying to get items off that task list. So it's not like a New Year's resolution where you go gung-ho or something and then you end up backing off or whatever. But mine's just consistent and I'm really persistent at it. I just don't have that kind of New Year's resolution like a lot of people do.

Brenton Ward:

And with the accounts that you have been mentoring over the last couple of years? What's the direction to give them when they come to you and say they've wiped the slate clean and they do have this nice, shiny new list of New Year's resolutions that may seem somewhat audacious? Do you try to rein it in or do you just have to run with it?

Ed Chan:

I try to encourage them not to stray too far because often if you chase the next shiny thing you'll get nowhere. And I use this example where, if you want to get traction and you want to get activity done and you want to get ahead, it's a bit like shining a magnifying glass on a bit of paper. You know you've got the light shining through the magnifying glass and it hits a spot and if you keep that in one spot you'll create fire or heat or fire. If you move it around the page you won't get anywhere. And often when someone chases the next shiny thing, they won't create enough traction in the one area to actually get them anywhere. So I really try to discourage them from going too far from the business plan that we've developed together and until it's fully implemented, we try not to stray. Now, obviously, things do come up from time to time and if they're related to your business plan, then you obviously do it, but if it's not, then I encourage them not to do it, not to go all over the place.

Brenton Ward:

Okay, cool, I think that's a good start. I asked you I know I asked that question a couple of weeks ago when I think the clock struck midnight and I was thinking about whether the news resolution should be on my list. But I'd run with what you've said and I think it makes a whole lot of sense. And, Ed, I'd like to come back to your point about getting traction in the year and kind of sticking to the business plan. Now you know you've got more than enough experience of seeing the January roll around with building your business and kind of getting momentum I mean, we're halfway through the financial year in Australia, and wherever you are in the world kind of aligning yourself to the business year as well. But what things should we be thinking about at this time of the year, in January, in our business and lining ourselves to the growth that we want to achieve this year?

Ed Chan:

Just to put things in perspective for the listeners who are not in Australia, because our financial year goes from July to June. Some overseas listeners might have a different year, so they may go from January to December. So the comments I'm making now is to do is in reference to from July to June, so I'll just put that out there to begin with. So, you're now into the new year and in the second part of the year, between January and June, we've got deadlines. So we've got deadlines, lodgements of tax returns by certain dates, whether it's some clients are due in February, some are due in March, some in April and May, and so forth and you just head down and continue pushing through those. However, around April, what we do is we start doing our planning. So we start planning out for the next year, meaning from July through to June, and the planning is twofold. The first one is resources, to make sure that your resources are there. So we work out a big spreadsheet and ask everyone you know when they're taking the holidays for the next 12 months. So if there's one or two people going at the same time in, you know a particular month, your capacity to produce the work drops off, so you won't have the same amount of productivity available to you because you know they've gone off. Now, in the main, you can work out that 80% of people will know when they're going on holiday, but 20% of people won't, because you know something might come up out of the blue, you might get an invite to a wedding or something and you've got to go. But in the main, if you can plan out 80% of it, then it keeps things pretty calm. So we work out the capacity for each month for the next year and then we start to work out when the clients should bring their work in and we invite the clients to bring their work in a particular month of the year. So if you know that you've got two staff missing in September, for example, then you ease off trying to bring the work in for September. There's nothing worse than having, you know, heaps of jobs sitting on the shelf and psychologically it really depresses you having too much work. And if you're not able to get to it in the start and the clients are going, you know where is it. It's been sitting in your office for four months or three months and it's quite depressing all the way around. So we try to plan the work coming through, coming into the office in line with the capacity that we have.

Ed Chan:

Now most people will say, Oh no, clients just bring their work in whenever they feel like it and there's no control over it. That's true, but in the main if you tell them when you want to bring the work in. So if they bring it in July of a year, you just told them to bring it in July. If they bring it in August every year, so you just ask them to bring it in August Because they bring it in that month anyway. But if you can get 80% of them doing that, then you can manage the last 20% who won't do it All right for whatever reason. But if 80% are doing it, then it's pretty calm. You know, your organization is pretty calm. So in PINVIL here we, you know like five o'clock everyone's gone home, no one works long hours and they get all their lodging up to date.

Ed Chan:

And there's another saying that you know the carpenter measures twice and cuts once. So the more planning you do, the less you have to react down a track. So we then work out which clients, and what capacity we have for each month, depending on the staff. Then we start to work out which clients should bring it in in which month and then we start to send the letters out to the clients and, as I said, you know 80% will comply because you're working with them when they bring it in any way.

Ed Chan:

You know somewhere bringing in to bring it in normally to, you know, march or February the following year. So you just asked them to bring it in at that time, so it's not such a big problem. And then you plan it out as best you can. Then you start, then you implement it, and follow up. So each month you follow up. So if you're in July you start following up. You know the ones that you've asked to bring in August, September, for example. The whole year is fairly busy so there's no rule sort of quiet spots, so it's either taken up between doing the work or planning the work. It's pretty busy throughout the year.

Brenton Ward:

Okay, A lot of what you were speaking about there is in terms of team planning and capacity planning and the team structure. Now I kind of want to divert a little bit, because there was a really good question on the wise tribe in the last week how do you attract and retain quality stars, which is a huge question. So I don't know how you break that one down, ed, but I'm sure you'll be able to manage that and I'll hold the second part, which is more specifically around team leaders being locally or if you've got an off-short team. But I'll park that one there and we'll focus on the first part. How do we find and retain good- quality stars?

Ed Chan:

That's a big question but I've got to go back a bit so that it gives you a bit of context. You've got to build the right team and people have complementary skills. So when you run an accountancy practice, the service they offer is broken into two. So the first part of it is doing your tax returns and doing your financial accounts, or the grinding work. So you need a particular person to do the grinding work. Then the other part of your business is your communication with the clients and explaining advice and that kind of thing. So you need a different type of a person to be able to do that and you need to break it into those two areas. If you break it into those two areas and you find people who fit those areas, then you have a much happier staff member because they're working in their flow. So I call it working in your flow. If you're in your flow, then you're really happy with what you do. So, for example, I'm the kind of person who's not a grinder. I'm not very good at grinding work. I can do it, but I'm just too slow. There's a half a dozen people in the office here who could do spreadsheets and things much, much quicker than I can be doing a set of accounts and so forth, and that's what they should be doing. And what I should be doing is I've got really good interpersonal skills, I've got really good communication skills and my role should be more about managing the client's expectations, relationship building, and explaining very complex tax stuff to the client in layman's terms. So I sort of based it on.

Ed Chan:

You know, when IBM sells a piece of software to a customer and they've got to then implement that bit of software and they get their geeky IT people who come in and they do their stuff and they do it really really well. But typically someone who's very, very technical doesn't have the communication skills to be able to talk to a customer, to know what they're doing. And you know, IBM has spoken to a very IT person talking in his own little language and you don't understand what he's saying. And so what they do is they hire a person they call a project manager who's got the language and interpersonal skills and communication skills to bridge the gap between the technical person and the customer. They convert, you know technical language into layman's language so the customer understands what they're talking about. So in that same way, that's how we run our businesses, because you know, 80% of accountants that come out of uni are technically orientated and they don't really have very good interpersonal skills nor communication skills, but they're very, very good at doing the work.

Ed Chan:

So if you can keep them doing the work, then you hire somebody else who has those interpersonal skills and communication skills who will then fill the role of the client manager. So if you go back to your organization chart, and your organization chart should be broken into a senior client manager who's got really good interpersonal skills and they look after the A and B class clients and they just do communication, advice, strategy, that kind of stuff. So obviously they've got to have a lot of experience as well as technical experience. They've got to have interpersonal and communication experience and they look after the A and B class clients and then we have an assistant client manager that assists them, but he or she is in training basically. But you've identified that person to have the interpersonal skills so you can train them up. But then they look after the C and D class clients, because that's a really good training ground for someone in training, because if they stuff up it doesn't matter as much because it's not an A and B class clients, and then below that team. They handle just the communication with the client. So they don't do any grinding or anything like that. The assistant client manager still does a bit of grinding because he or she is still trying to develop their skills, but at the same time, they're shadowing the senior client manager around communication and the way they talk.

Ed Chan:

You don't say debtors, you say people owe you money. You don't say debit loan account, you say that you owe money to the company. You develop those kinds of interpersonal and communication skills. And then below that you've got the team leader, who's very, very experienced, who then runs the job, who's very technically, and he or she has got no communication skills and they're just happy to sit and do the work, check the work, run the teams, train the teams and they get the work to a stage where they just hand it across to the client manager, who then goes and talks to the client. And then most accountants that come out of uni about 80% of them are more technical orientated and about 20% of them have interpersonal skills. There's a smaller amount that has those interpersonal skills.

Ed Chan:

So this comes back to finding and attracting quality staff. So the reason why I brought all this up is to try and find and attract quality staff. Now if you find someone who's got interpersonal skills and that's what they enjoy doing, then you've got a role like that for them and then you'll never lose that person because they're in their flow. And then if you got someone who's technically orientated and they don't like talking to clients and that's all they do, just technical, then you're going to keep that person for a long time. But if you try to make that technical person a client manager with interpersonal skills, then they're not going to be very happy, they're not going to be able to do their job very well and then you're going to run the risk of losing them. Counter, if you have someone who's like me, who's got good interpersonal skills I hate doing the grinding. If you got me to do the grinding, I'll leave. And then you do someone like me, I'll turn to do.

Ed Chan:

A lot of firms run it very shallow and wide, meaning that they can't hire this superstar who has everything, who's got who's really fast at doing the work, who never makes a mistake, who's got really good interpersonal skills, and it's really hard to find that person.

Ed Chan:

And then if you do find that person, they're very expensive and then they'll just go to the next highest bidder, so you end up losing them. So I think I answered the Facebook question. You've got to go back to your all board, your organization chart. You develop your team structure with those people in the team and then you go out and you find people to fit those positions. So what you get is you get these complementary skills and when you get complementary skills you end up getting one plus one is five Plus. You end up retaining those people for a very, very long time. If you look at our group of companies, we've got lemon offices and I still own Pimble here and the staff here have been here 15, 20 years and it's because we've identified their strengths and we've put them in the right seat, in the right bus, so to speak, and they're really happy doing because it's within their personality.

Brenton Ward:

And you said what about the old adage? People don't leave companies, they leave their managers. How does that sit with you?

Ed Chan:

Absolutely. That's 100% true. People don't leave companies, they leave their managers. Something you can have a grinder who's doing the work and under manager A they do really really well and under manager B they do really really poorly. Right, and it's the same person. The only difference is the manager that's managing them Right. So if they're doing poorly with manager B and they end up leaving, they don't leave the company, they leave their manager because they're here or she was poorly managed.

Ed Chan:

So, and often we come out of uni and we're not taught to manage people, we're taught to do the work and when we get put on the production line, we're taught to do our debits and the credits and so forth. And then you know and that's easy to do, I'm you know most accountants can sit there and do the work, but then you ask them to manage four or five people, right, and that's really difficult. So they do need a lot of help because there are no courses that you can just, you know, do that will help you manage people. You know the way you talk to them, the way you follow up, the way you set parameters, and there's a difference between delegation and abdication. There's a lot in helping your managers to manage their team.

Ed Chan:

The success in an accountancy practice is not how will you do a tax return, but how will you manage your people. And often when the captain says to me, you know I'm really successful, my clients love me, I am doing really well. If he's a sole trader, then that's pretty easy. With all due respect, that's not hard to do. What's hard to do is if you can get 20 people doing that. Doing what you do now. That's hard.

Ed Chan:

And so I come back to the point that you know it's not preparing a tax return or preparing a financial account. That will be the basis of your success. It's how you manage the people underneath you and how you train them to then manage and train the people below them. And if you can do that really well, then you know your practice will be successful. But if you don't know how to do that or you're not Training the people very well, then you end up losing people and also you know it's not very efficient. So, for example, a very simple one often partners bypass their client managers and they go to their staff and they give work to their staff and an accountant often says to me oh gee, you know, I wish my Club managers would take more responsibility for their staff and take more responsibility for the clients. And then when I go and Observe them, you know I'm constantly seeing them undermining the club managers. And then I said, oh, why are you undermining them? And they go wrong.

Wize Mentoring:

I didn't know I was on undermining.

Ed Chan:

That's typically to respond back to me. And you know they. What I mean by that is that you know I can't give them some work the part to do to a partner. Instead of going to the club manager who's supposed to be in charge of his or her staff members, they bypass her and go to their staff and give the work to their staff. Now, if you constantly undermine them, eventually they'll say if you want to manage them, you manage them. Then you know, and I'll sit back, and that you manage them. And, of course, if you keep seeing the clients and Not bringing the client manager into the meetings with you and bypass the, the client managers, and talk to the clients directly, then eventually, well, the client manager will say, well, if you want to manage that client, you manage that client then and I'll just sit back here and Be a passenger. So you need to know how to manage people and you need to know how to empower them and not do it by control and command.

Brenton Ward:

So often that habit, though I mean partners will be ingrained in doing that, and it's not going to happen overnight. I get to do it, so how do you actually part ways with how you're currently doing it?

Ed Chan:

The funny thing is, most people that I speak to, didn't know they were doing it right. So that's the first thing. You've got to know, that you're doing this. And when I say to them we go oh yeah, that's just common sense.

Wize Mentoring:

Isn't it?

Ed Chan:

Yes, but it's not so common, although this common sense is not so common. So the first thing is you've got to know that you're doing it and you shouldn't do it and why you shouldn't do it. And then you know when I explain it to them, then it becomes quite clear. Then that's the first thing. And the second thing is to break those habits. And that's hard and it's a bit like brushing your teeth with your right hand, and if I didn't ask you to brush your teeth with your left hand, it's going to take you a pitting it with your left hand quite a long time, quite a lot. You do it with your left hand quite a bit before it becomes a natural thing.

Ed Chan:

So I do a bit of coaching, as you know, Brenton, and often I say to him the first six months you know we're putting all the systems and the structures in place. The next six months it's gonna be really boring. I'm gonna go over the same things over and over and over and over again until you create a new habit until it's cemented in. Because if you don't do it like 30, 40, 50 times and I leave, then you just unlearn everything that we've learned and won't become a new habit, so it won't be cemented in if you like. So the program that you run here, with wise mentoring, will Constantly remind you of what you need to do.

Ed Chan:

I've been coaching this firm for two years. I'm just thinking of this particular firm and he said to me you know, you said the same thing, you know like a hundred times and then finally I get it and I can. You've been saying the same thing and it's a bit like that. So the great thing about this program is that we'll be going over some of the things, and sometimes it's like building blocks. You need to, you need to have done, you know A, B, and C before you can do the F and G, and just constantly asking questions, looking at things at a different angle, and eventually sink in.

Brenton Ward:

But it is a long runway a question slightly off- topic but within the realms of this discussion Hiring new staff and the whole interview process. Now, I know it's probably been a while since you've done an interview to hire a new staff member or team member, but it's such an interesting process because I mean an interview at the end of the day, you're never really interviewing the real person that's sitting in front of you. They're always going to put their best self forward and tell a few white lies about what they're great at, and what they're not. But is there a way of cutting through the untruths in an interview process to really see the person sitting across the other side of the table?

Ed Chan:

Absolutely. I guess there are two parts to the first part of it is, obviously do you get along with each other? That's easy because you know, through sort of casual conversation you can pick up the personality, so that the other side and then the other side of it is, can they do the job I know tell you all sorts of things that they can and can't work with. We asked them, on the technical side, we asked them a whole lot of technical questions and it becomes very obvious when they can or can't. But then some people can actually convince you that they can and then they can't. So then what we do is we get them to do a few jobs for us, so you get them to do a bastard, or you know some bookkeeping, so forth, and then, based on that, you really know whether they can or can't do it. Now that's on the grinding side, because as I was saying earlier, there's two parts to your recruitment that are you hiring a grinder or you're hiring a minder the minor is the manager with interpersonal skills. Then, with the interpersonal skill side is a little bit harder, obviously, but then you should have a whole lot of questions that you ask them and you say to them what can you explain to me what a division seven is right now? If they can't explain it to you from an accountant's perspective, then that's a big problem. But if you're hiring a manager, they have to be able to explain it to a person. Most accountants can't do that. All right, they'll explain it to me in accounting terms, and then I got to look at whether they've got the potential and then I do a lot of training On the interpersonal side.

Ed Chan:

You know, you don't say debtors, you say people that owe you money. You don't say creditors, you say creditors, you say people that you owe money to. And then you've got to be able to change gears in a room, because if you're with a couple and one's like a CEO or a firm and the other one Is like a tradesman, and you have to be able to change gears when you're talking to them, so you have to be able to turn around, say to the CEO, can I have a list of your debtors? But then you have to. Then when you're talking to the blue- collar worker, you have to say can I have a list of people that owe you money? And you have to be able to do that instinctively and I can train that.

Ed Chan:

But there's a certain amount that you can train and then beyond that it's very difficult. So if they're at a certain level, they can only look out the C and D class clients for those who want to look after a B class with a higher level of interpersonal skills and communication skills and they have to be really, really good at a higher level. And we do a lot of that interpersonal skills training for the client managers and obviously, for the grinders who just sit there and do the work, we don't bother because that's not their role.

Brenton Ward:

That's the other question I had, actually, because I mean everyone gets told that they should have a training and development plan for their team, but I have yet to see a quality one or one that actually gets stuck to, or one that's really tailored for finders, miners, grinders, because when you're training and developing you obviously need to split that up into the different types of the different roles that you're trying to develop. So how have you approached in the past the whole idea of having a proper training and development plan in place? The technical bits are probably easier to talk about, but then you've got the whole soft skill and personal side.

Ed Chan:

So I think that you just mentioned every firm is different because A, you've got different people that are in there, and B the size is different. So often if the firm is a lot smaller, then you may need a person that bridges both a bit more than perhaps if you're a larger firm and they can stay very, very in their lane, so to speak. But if the firm is much smaller, then they have to be able to walk in both lanes a little bit more than if you're a larger firm, where you can just stay in your lane. So, for example, if I was trying to hire somebody, or if I was training someone who because of where I am. T hey need to have a bit more communication skills, but at the same time they've got to be able to do the work as well then you focus on a different sort of training. But see the other thing that most people miss is that they spend their time with the clients as a partner. They spend all their time with the clients and they don't spend any time with their staff. The two biggest assets of your organization are obviously your clients, but it's also your staff, and if you don't spend time with them and if you don't invest I call it investing in your balance sheet. If you don't invest in them, then you end up having to deal directly with the clients yourself. But if you spend time just micro- training them not micro- managing them, but micro- training them to you know the way you speak to a client, the way you face the client, the body language you use, you know and the way you say something, you micro train them and get them really, really, really, really, really good at that particular area Then the less work you have to do.

Ed Chan:

So let's say that you've got a $3 million practice. You should have three client managers each managing a million dollars to that $3 million, with a team underneath them. Then all you've got to do is spend all your time with those three client managers, not with 800 clients. So your ability to leverage is much greater. See, typically accounting firms hit about a million dollars per partner and then they hemorrhage. So if the firm was a $5 million, practice is about five partners and if a firm is a million dollars, there's one partner. So it's about a million dollars per partner. One to one point two, one point three million per partner.

Ed Chan:

The reason why they hemorrhage at one to one point two million is because they do it a traditional way all the inquiries come to them and then they delegate the work to the team. You shouldn't do that, because 80% of the inquiries that come through, the team can handle it. You do n't have to come through your hands. So the way we do it is we direct 80% of it to the client managers, so they're the first point of contact, and then the client managers bring the partners in for the last 20%. Now if you do it that way, you can go to $5 million without putting another partner on, and often people put partners on because they hit a capacity and they can't go any higher.

Ed Chan:

It's because they do it. They take all the inquiries and they delegate it. That's the wrong way to do it. If you want to scale it and grow it, that's the wrong way to do it. So if you flip it the other way, where the client managers are handling 80% of it and only bring you in for the last 20%, then you can go to about $5 million with five client managers looking after a million dollars per team and you're just being brought in for 20% of the time when it's a very, very high level or it's a PR activity and so forth. So you're able to then leverage much greater if you do it that way.

Brenton Ward:

Now, just on the topic of partners and adding partners to the mix equity conversation. In terms of retaining staff, what's your view and what's your position on giving equity or offering equity to staff as a retention strategy?

Ed Chan:

To answer that question, I've got to take a couple of steps back. I don't believe a partnership model works, and I'm not talking about the legal structure, I'm talking about the management structure. And the reason why it doesn't work is because in a partnership, because you're an owner, you end up having a say in everything. Right, even though you may not be good at something or you may not be qualified, you want to say in it because you're an owner. So we don't run it as a partnership, we run it as a corporation. And again, I'm not talking about the legal structure, I'm talking about the management structure. So what I mean is I separate ownership from occupation. So if someone's a great COO, then they stay as a COO. So there's got to be a CEO, a COO, and there'll be client managers as well. So they get paid according to their occupation. And then the people who are responsible. So there'll be a marketing manager. They're responsible for the marketing, so they're held accountable for the marketing.

Ed Chan:

Now, if you have that model, then you can give equity to your staff, and that's what I do. But on a day-to-day basis, even though they're shareholders, they report to the CEO, who runs the organization, who's responsible for growing the business and then they'll get a dividend based on their shareholding in the company. But at the AGM, as a shareholder, they have a say. But on a day-to-day basis, even though they're shareholders, they still have to report to the CEO who's responsible for running the business. And if you run it like that, then you don't have disputes or you have less disputes and everybody knows where they stand. So if you're not in marketing, then you don't have a say in marketing. The marketing manager might ask you for your opinion, but at the end of the day, they're responsible for making the decision around marketing.

Ed Chan:

Because we're going to as a board, we're going to hold them accountable to those KPIs. That's around marketing. And if you're the COO in your organization, your chief operating officer, then you're going to be held responsible for productivity, workflow, production, turn around times, those kind of things. And if you need people to help, then we're hired of people, but you're responsible for those KPIs. And if you're the marketing director, if you like, you've got no say in the COO activity and the COO you have no say in the marketing and we just hold each other accountable to the KPIs that we've set at the start and that works a lot better than your partnership model, where, you know, I've been in partnerships where they argue for two or three hours over what chair the receptionist has just set on and it's a waste of time what color the brochure should be, and they're not even qualified to advise on marketing and yet, because they're an owner, they're a partner, they won't have a say and it just doesn't work.

Brenton Ward:

Okay, so the partnership model doesn't work. And then the equity position for staff members to stay in the business.

Ed Chan:

Yes, that works. So you know, as part of an incentive plan we do issue share. Student it could be. You know we would do some sort of an incentive, whether they end up buying in or we give them some bonuses and convert the bonuses to equity or whatever that case may be. But that's separate from their occupation and they get paid for their occupation and they get bonuses based on their production in the occupation and the shareholding is a separate matter, which you know. They're entitled to profits based on their equity. And then other things come in. You know seniority, how long have they been there, their contribution, and so forth. So you work all that out. But that corporate model works and if you issue shares to your employees, then that works as well, as long as it's not a partnership where they've got equal say in everything in the business. That doesn't work Okay.

Brenton Ward:

That makes perfect sense, Ed. We will finish up there now. Thank you so much for your insights. Love having these chats and looking forward to hearing more from you in the coming month.

Ed Chan:

Yeah, thanks for having me, and you're looking forward to it.

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