The Wize Way

Episode 138: Reflections of 2024 and setting your goals for the new year

• Wize Mentoring for Accountants and Bookkeepers • Season 2 • Episode 138

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In this episode of The Wize Way Podcast for Accountants and Bookkeepers,  Thomas Sphabmixay with Ed Chan and Jamie Johns dive into the critical topic of goal setting and planning for the new year. 

Recorded as the financial year approaches its end for many firms, this episode provides valuable insights on how to review past performance, set effective goals, and ensure your team is aligned and prepared for the upcoming year!

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Thomas Sphabmixay:

Okay, so today's topic on reflections of setting your goals for the new year. So for for most of us, we're halfway through our financial year, but for the Americans, they're pretty much at the end of it, and so you know, when we're halfway through this year, this is still a great chance to check back on the scheduling that you've been doing in May because a half a year has just already passed and see how you're tracking along to that overall. Are you, have you scheduled out your work for the next three months? Have you reviewed your ATO list? Usually, around this time things start to die down. Clients are going on holiday. This is a really great time to KPIs and see what sort of things make sure you take a look at your capacity and what you might need to do in the second half of the year.

Thomas Sphabmixay:

All right, but I would rather hear from Ed and Jamie, to be honest on this. They've lived through many, many more Decembers than I have and I would rather hear from them on this. But starting with you, Ed, what are some important goals you've set for your team in 2024? You know you've got two teams. Now You've got a Wize team. You have your Chan and Naylor team, but what's the core theme or goal that you're setting for them, Ed?

Ed Chan:

Yeah, thanks, Thomas.

Ed Chan:

Yeah, the team's growing, so the business is growing, so that's great.

Ed Chan:

So I guess we're talking to firms not just in Australia but around the world and they like, in Australia, we have a calendar year and we've got a financial year and our calendar year is finished, but our financial year doesn't finish until the 30th of June.

Ed Chan:

So for Australian firms, it's a reflection. It's, you know, seeing how the last six months have gone, your Fab Five, revisiting that and comparing it with your budget, and you know seeing whether you're on target or you know what part of the Fab Five that you're behind in and putting extra effort in the areas that are not going so well. And for the firms that end their finance not only their calendar year but their financial year on the 31st of December, it's time for them to reflect on last year, the whole year, and then work towards the New Year and redoing their staff performance reviews, wage changes, changing the charge-out rates for the new year. You know, looking at your capacity plan, building that into your capacity plan, making sure that you've got the right number of staff in the right positions, and we often talk about playing in position and not out of position, and that's where you get the most efficiency from. So, looking at your deep and narrow teams, making sure that, yeah, go on with those deep and narrow teams, Ed.

Thomas Sphabmixay:

A lot of firms have also asked you know, should we pay out? Should we consider pairing out bonuses around this time? Should we wait to the end of the financial year, like, should we do something for the team or is this a time to do it or no? Yeah, and reflecting on the year, yeah, for Australian firms.

Ed Chan:

It's just part of you know, making sure that you're on target, keeping the team informed as to where they're at in terms of you know the numbers, and so you should be doing this once a month anyway with your team. So they should be excuse me, they should be right on top of where their numbers are. And we generally give a Christmas present, but not a bonus. Our bonus comes in at the 30th of June and it's based on the profit for each team. So each team you'll be measuring their profit and for us, if we hit a 25% EBITDA, for me it's a fair return on my capital. 25% because you know if I'm going to tie up my capital in my business rather than somewhere else, I'd like a fair return and I've determined and everybody can use a different number determined a fair return is 25%. So we measure each of the team's profit and then anything above 25%, we share that with the team. So, depending on where you are in the world, this might be a half a year or it might be the beginning of the year, and if it's the beginning of the year, then you know it's time to do your budgets for next year and to determine. You know what the new budget's going to be and you talk to your team about this.

Ed Chan:

Your team leader, which is your senior client manager, should be heavily involved.

Ed Chan:

They should be coming back to you with what they believe the next year's budget should be and they should be setting those budgets and working out their capacity.

Ed Chan:

And your team leader the leader in each team, which is the client manager should be doing all of this for you. And then, once they've come back to you with their budgets, then you put your whole company's budget together and that becomes your measuring point for the next 12 months. And, of course, from there you've got to start doing your scheduling, identifying which clients should be bringing their work in for which month of the year, and scheduling it for the next 12 months. And then you know your admin team should be calling the clients, as the months are approaching, to bring their work in so that it's evenly distributed throughout the year. Rather than sitting back and waiting for it to come to you, you should be approaching your clients and asking them to bring it in in a particular month of the year, based on your scheduling for the whole 12 months, so that the work is evenly spread out for the next 12 months yeah, thank you for that, Ed.

Thomas Sphabmixay:

Thank you, I think a lot of that major theme there is really in just planning as much as possible. It makes me really think of you know, yours and Jamie's analogy of the sailboat or the motorboat, and it's either you take this stock, take it halfway through this financial year, and ask yourself are you actually in control or you're just getting blown around by the winds. That first half of the year, okay, and I mentioned to one other firm, you know, sometimes you might not have felt that financial year went the way you did, but we're going into a second half, so it's still always a chance in a new year to be able to improve yourself. And speaking of stock, take Jamie, you have something that you developed and we've been using the discovery scorecard, the life scorecard as well, the discovery scorecard, the life scorecard as well.

Thomas Sphabmixay:

And you know, can you take us through, like, why is it all about systemising things right and even coming down to personal development and then checking where you are sitting, in life in the current moment and how that compares to the previous year to try and make it improve? You systemized that whole process, so could you, you know, in addition to that, I'm really excited. I just want to jump to that, to be honest, but like, just to give us some context to lead in, what is your top learning of the year? You know, before, all of that, Jamie.

Jamie Johns:

Yeah, thanks, Thomas. Look, I think the thing around our career growth, you know. So, whether we're it doesn't matter really where we are in our career, but everyone would have heard of the concept of you know getting outside your comfort zone. Comfort zone so, perhaps if I and it sort of brings in, you know, end of the financial year, you know, where everyone has a New Year's resolution and that type of thing, and so we, everyone's probably heard of this concept of you know getting outside your comfort zone. Yeah, so essentially, you know, look, whether we're in America or Canada or wherever, December or January seems to be a year of New Year's resolutions, as we say, and sometimes it's good to do a bit of a stock take and see where you're at. But if you can see my screen there, it's really about you've sort of got four zones there, you've got your comfort zone and a lot of us. The biggest problem I have with accountants all over the world and bookkeepers is that they don't have any time. So today, no time, you don't know what you don't know.

Jamie Johns:

And I remember when I first started working with Ed, you know, I was just working too many hours. I was, you know, ready to throw it in. I'd had enough, and so in that sense, I was a clean slate. I'd had enough, and so in that sense I was a clean slate. I'd had a few coaches and I went to Ed and I said, look, you know, I need some help. And it was pretty much this comfort zone here on the screen.

Jamie Johns:

And I remember reading years ago on my travels this chap called Buddha said ignorance is the root of all suffering. And I can tell you, guys, I was suffering. I was doing too many hours, now, wasn't seeing the family, not enough fun and recreation in my life, and you know, my health and fitness weren't the best, mental health wasn't the best. So I was really probably what I was in, you know, used to do is in this comfort zone and then I really needed to get into this, into this fear zone, and some of the things that I had was like lack of knowledge. I really didn't have any long-term plans or vision, I'd guess, and I think a big one there is, I didn't know the hell. So I'd got to about a million no, sorry, got to about 700 000 in fees and was just burnt out.

Jamie Johns:

And I bought another firm, which is the worst thing I could have done in hindsight. I just didn't know the hell, and you know I had a bit of disbelief around. You know it's not possible to grow. You know I'll sort of throw my hands up in the air and it wasn't possible. Anyhow, I decided to work with Ed and one of the things here is that they also there are four stages of learning for everyone, and it's important to recognize this. Psychologists have actually said this, but often in the early years here we sort of got unconscious incompetence in that sense that we don't know what we don't know you know, so when I started working with Ed, I started getting in this learning zone and after a while, I started to be conscious.

Jamie Johns:

I started to be conscious of the things that I wasn't doing and the things that I should have been doing. And so that sort of started working with Ed, was committing to one hour a day of working on my business, and it's just a very practical thing. Anyone can do it. You can go to your calendar now and pop in one hour a day to work on your business. Or even if you're a senior accountant or a senior client manager, it doesn't matter. There's always some learning that you can do. And in that process, you've got to continually acquire the right skills and the right knowledge. And so, you know, after a while I started sort of getting in this learning zone one hour a day, and that one hour sort of slowly expanded, you know, and part of that process was finding a guide, you know, and that was sort of Ed and obviously wise these days.

Jamie Johns:

But find your mentor or your tribe, you know, some people say your tribe, and then once, once, you continue on this and you commit to that one hour a day of self-development, if you like, and learning you get out into this the growth zone. So you move from conscious incompetence to conscious competence. Okay, so you're very aware of the things that you should be doing and you know some of the points there, Thomas, like you sort of end up actually having a longer-term vision for your life. You design your own life, you know. You actually write down your goals. You write down what income you want to earn. You determine your growth path. If you're in a team as a senior client manager, you know, you learn what the concept of grinders, minders, you need to start with the ending yeah, start with the end in mind.

Jamie Johns:

So the Fab Five is another thing that you'll put in place. Yeah, so essentially they're um, you know. I think it's a good time to recognize um, you know you. Everyone should ask themselves you know, where am I on those four steps? You know, am I in my growth zone or am I still in my comfort zone? So, but it's a good time to ask um in that sense, where you are, um, you know, as a professional, in a career, whether you're just in your comfort zone or you're in your learning zone or the growth zone, and I think we'll all know that. So that was sort of part of the process I went through. And there's another little tool here, Thomas. In the Wize Hub we have what's called a discovery.

Jamie Johns:

Yeah, we have a discovery scorecard and in essence, this scorecard has a series of questions what do I do? I'll just cut to the chase in this scorecard. And here's an example for example, here, but essentially once a year. It's really good if I can use an accounting term, to do a stock take, and you should use this scorecard at least once a year, I've done it every year for a long time now, and in the early days, you know, I just had paper, I'd just write it down on a piece of paper because I had these scorecards.

Jamie Johns:

But, for example, what the do to everyone. It says you know, on a scale of one to ten, how happy are you with your career or business, right? So you need to sort of think well, am I, you know, am I a ten, am I a 1? You know where am I actually at? And then the next question will be you know, on a scale of 1 to 10, how happy am I with the level of income or wealth that you know I earn? And so you've. Really it's a very personal thing, so you've got to answer that question as honestly as you can and go around this circle. So you know health and fitness on a scale of one to 10, how happy are you with my health and fitness? And so if you do that process, you'll determine your own scorecard and you'll see every year whether you're progressing and whether that scorecard is getting bigger. Now, a nice, perfect round circle means that a wheel will run fast. If you've got a nice round circle, a wheel will run fast.

Thomas Sphabmixay:

Okay. So, Ed, I'd like to come back to you. I would like to get an action item from you. What is one step we could take to start the next calendar year, just to be a better leader? How can we be a better leader? Or go into our firm and be a better manager? An action item from today.

Ed Chan:

Sure, if you've ever read the book The Seven Habits of Highly Effective People by Dr. Stephen Covey he talks about, how if you want to make the greatest change, you need to work on yourself first before you work on everybody around you. So, as a leader, a s the owner or the leader of your firm or the leader of your team, it is about being a better person and stepping things up for the rest of the team, because they're looking to follow. So you can have the best systems in the world, you can have the best people in the world, you can have the best people in the world, but if you don't have good leadership, the whole thing falls apart. So if you expect your team to work at, you know, 100%, then you've got to go to 120. So if you go to 100, then they'll go to 80. If you go to 80, they'll go to 60 or 70. So they're always a little bit behind you. So you've got to lead. So the biggest thing I'd like to do with you is to.

Ed Chan:

What helped me was focusing on the 80-20 rule delegation, making sure that you're not starting tasks from start to finish, that you're getting somebody else to do 80% of it and you do the last 20%. So here's a very simple example Jumping in there and doing an invoice for a client from start to finish, well, that's not managing, that's doing so, working on yourself to manage, which is getting somebody else to do 80% of it. They come up with a draft and then you do the last 20%. So everything that you do should reflect that. So if you're doing a task from start to finish, then you're not managing, you're doing, and doing runs out of you, run out of time. There are not enough hours in the day to do everything from start to finish. So you've got to do everything from start to finish. So you've got to learn, as a leader, to delegate.

Jamie Johns:

Would it be fair to say, Ed, that, just like those examples you said, those sorts of things are what they call urgent and important? Yeah, would you say that?

Ed Chan:

Yeah, absolutely. If you're doing the task yourself, it's urgent and important, it's putting out fires, it's reacting to problems that are occurring, and that's where you don't want to be as a leader.

Jamie Johns:

Yeah, and I think, Ed, just to help everyone, I think, like you know, some of the greatest, I guess, business people in the world, they always had to-do lists, didn't they? You know, like Bill Gates would wake up in the morning, everyone. The first thing he would do is write a to-do list and you know, essentially he would list what are the most important things that he needs to do to move the business forward. And you know you can do it. Your to-do list can be made up of Quad One activities. You know the next phone call to take, the next tax return to do, the next email to respond to, but essentially what you want to do on your to-do list.

Jamie Johns:

You want to have these not urgent but important activities as well, Ed, and you know often they're preventive activities. You know, and in the WizeH ub there's a list of things here that you know you should be doing. You know um. You know understanding the ideal teams, understanding your capacity plan, classifying your clients. You know um having client portfolios and understanding the no bypass policy.

Jamie Johns:

So these types of activities, all these activities here, even like scheduling, you know, scheduling works on here. That's an absolutely fantastic one if you can schedule a work. So all those types of activities that we've listed there, they're sort of these, these not urgent and important activities, preventative actions, you know, training staff and clients, educating staff and clients, relationship building and, um. So I think, ed, it's just drawing on what you said um, it's an easy sort of to get caught up in these day-to-day quad one activity, but if we put time aside and allow our to-do list to include those list of things, then we will move towards the direction that we want to go to, whether we're you know a senior client manager or firm owner or whoever.

Ed Chan:

Yeah, and and as you may recall, Jamie, when I started working with you, you were spending most of your time in Quad 1, which is where I was. I was working over 100 hours a week just trying to get things done.

Jamie Johns:

I think that says it there yeah.

Ed Chan:

And until I started working in Quad 2, which is planning and preventing and educating staff and educating the clients, then I just kept, you know, I just kept putting fires out instead of putting activities in place to prevent those fires from starting again. And since I've been working in Quad 2, my hours have started to drop to a point now where the business runs by itself. I only do Quad 2 activities, like today. Today is a Quad 2 activity which is educating, and h elping everybody here to run better businesses, and that's going to have a far greater outcome than me sitting there and doing a tax return. A far greater outcome than me sitting there and doing a tax return. So if you, as a leader, and including the leaders of your teams, if can encourage them to work on Quad 2, and the higher you are in your team, the more you need to work in Quad 2, naturally, activities still need to get done. So there are people that will work in Quad Two. Naturally, activities still need to be done. So there are people that will work in quad one, which is, to you know, get things done. But quad two is where the leaders should be working in and I think the greatest thing is to, you know, put an hour aside in your calendar a day to do that, to work on quad two activities and um, and you'll find that the more you work in quad two, the less you work in quad one.

Ed Chan:

So, you may recall, you're with both of us um, when we're working quad one, we're working really long hours and, uh, there were just wasn't enough hours in the day. But once you start working quad two, you go from thinking there are not enough hours in a day to I haven't got enough resources, they're not trained up enough. It changes your mindset around how to manage your business, because we all grew up as grinders, we all grew up doing the work. So all of a sudden you know we're running a business and it's a different skill set, it's a different mindset and you need t o step up to the next level, otherwise you'll burn yourself out and that's what was happening to me and that's what's happening to you as well. And this is all Dr. Stephen Covey's principles and they're very important, yeah.

Jamie Johns:

Yeah, what I found, Ed, was, as I did, more Quad 2 activities. My Quad 1 activities dropped off, but my ability to grow the firm with the team increased. So that was what I sort of found the less Quad 1 activities I did dropped off and the more Quad 2, and the ability to grow the firm and build the team went in this direction.

Ed Chan:

Yeah, and initially, when you've got so much work on and you're thinking, where am I going to get the time from to train the staff? It's quick, if I just did it myself by the time I've trained them, I could have just done it. That's the way you think and you think, well, where am I going to get this extra time to train the staff or design the checklists, or you know? But you find that if you put an hour aside a day and you just focus on quite two activities, eventually you hit that inflection point where the two lines meet. And when that happens it's. I got to a point when I went from 100 hours down to about, you know, 10 hours a week. That's right.

Ed Chan:

I'm thinking, wow, what am I going to do now? But, of course, this constant fine-tuning that you've got to do, because when you're managing staff it's a constant work. It's resetting direction, resetting expectations, reinforcing what your values are and the direction that the firm needs to go, just constantly, it's just constant.

Jamie Johns:

So, anyway, hopefully, you found this session useful. And you know, reach out to the reach out to the wise team if you've got any questions. There's, there's an eye and there's all the mentors, and there's Ali, our WizeH ub coach, and Dani, and then there's quite a lot of us. So, if you need one-to-one mentoring, we've always got WizeG rowth and we've also got the Wize Hub there that Selena flashed up as well. So it's got a lot of tools in there. Utilise the resources and lean in on the Wize team so that you know you can get the answers and get the new skills and knowledge that you need to move forward. So we're here to help, aren't we? Ed and Selina and everyone.

Ed Chan:

Yeah, that's our giving back. It's additional knowledge that we've gained over the years.

Jamie Johns:

Yeah, yeah, so always email us. The more questions, the better, that's it. We're here to help you. Ed and I wish everyone a safe and Happy New year and a Merry Christmas.

Ed Chan:

Yeah, we'll see you in the new year.

Jamie Johns:

Yeah, we'll see you in the new year and don't forget to take your scorecards. See you everyone. Bye, Bye.

Wize Mentoring:

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