Welcome to the Escape the Accountants Trap podcast. It's a podcast to help accountants, CPAs and bookkeepers escape what we call the accountants trap. It's where accountants are not getting paid for their value and are forced to work long hours with high demand clients with little pay. Well, how do you escape the trap? One way is the topic of today's episode, and that's becoming a better consultant.

And to help end the discussion, I've invited Ed class from sage, who is an expert on consulting consultants. Ed, welcome to the show. Thanks so much for having me, Adam. I really appreciate it. I'm turning the tables. You, you were on my podcast a little bit ago, so I appreciate the the invite. Yes, that was a really good podcast.

So if anybody listening, check it out. What's the name of the podcast? The Sage Thought Leadership Podcast? I've been doing it about ten years. We have have over a thousand episodes in the can, so. Excellent. Well, speaking of Fall Leader, you are a expert, a thought leader on meta consulting. And as we were talking pre show, you said a media consultant is a consultant to the consultant.

So explain that. Yeah I mean it's a it's a self given title that I've come up with this, this concept of meta consulting. I think it was I don't know, it was during Covid. I think that it that that kind of came to me that I spent most of my career working with or for people who do consulting themselves.

So the idea of of being a consultant to consultants led to the idea of meta consulting and that there are concepts around the discipline of consulting that many people in the professions don't really understand. And they they understand it. They. And sometimes I will give a presentation where I talk about this and they're like, I've been talking about that for years, but you gave me a name for it.

You gave me understanding about what it is that we're really talking about. So hence that's the that's the idea of meta consulting. All right. Well let's dive in. So so what I guess how do you define an effective consultant as a business advisor? CFOs. Essentially what we're doing is consulting. We're guiding our clients to have a better business.

And that's what they want from us. So how do you sort of frame what a successful consultant looks like? Well, I mean, I consult as a successful consultant is defined by their customers being successful so that there's there's the answer. But let me let me back up and just talk about what does it mean to be a consultant versus what is called by others as a surrogate manager.

And a consultant is a person who has, some influence over an individual, group or organization. But, and this is an important part, has no direct authority to make decisions. Okay. And I think that it's really important to keep that in mind, that if you want to stay in the consulting role, you don't make decisions on behalf of those you serve.

Now, there's another role which I'll call surrogate manager. And by the way, this is based on the work of Peter Bloch, which, if your audience hasn't read, you should absolutely read just about everything that Peter Bloch has ever written, including all four editions of his book called Flawless Consulting. Okay. But so he has this thing called a surrogate manager.

And this is a person who in a position who acts on behalf of or in place of a manager, in other words, a surrogate manager has been invested the authority to make decisions on behalf of someone. Okay. And I think it's an important point of delineation point to say that a consultant can come up with what I call the Ford model.

They can they can come up with findings. Here's what I found. They can come up with. Here's some options to take care of what what I found. As to the problem. They can even make recommendations is I think you should do this and here's why. Or maybe here's a couple different, based on the options of the three that I'm talking about, this is the one I would pick.

And why. But a consultant does not make the decision. Now, there's nothing wrong, by the way, with being a surrogate manager. I mean, I think that surrogate managers can be great. And but I do think that it has to be clear in the at the beginning of the relationship, which which one are they looking for? Because you cannot be both those two things are mutually exclusive.

And I think where people get stuck is when they go into a role thinking they're one, and the the customer is really looking for the other. So I want to make that abundantly clear up front. Are you investing in it or are you giving me the authority to make decisions on your behalf? Or will you make all decisions?

And I will just bring you options and even make some recommendations. But you will make all decisions. And I think that's a that's an important point of clarity for a lot of folks. Yeah, I think so too. And I think a lot, especially for those that are bookkeepers or controllers or even fractional CFOs, because there's this gray, this gray line that you are performing the task as a bookkeeper, you're performing certain tasks, and you are sort of acting on behalf of the client, performing certain tasks, getting a job done with a CPA, doing the taxes.

But when you're wearing your consultant hat is completely different if you're it really is. I agree with you. The Ford Model you're finding, finding out what's going on, recommending options, but you're not making the decision. You're not actually doing something you're guiding. And if you do, if you want to get a do you have a model where you do make decisions on behalf?

I think that's great. Just make sure that you price appropriately for it, because I think that's the other thing. When you are in the in the mode of surrogate manager, where you are making decisions on behalf of someone, that's a much a higher risk position for you to be in. And as a result, you should get paid commiserate, leave for that additional risk that you're taking on.

And I think that that's it makes complete and total sense, I think where a lot of people get caught is they start doing making decisions, but they don't change the nature of the relationship. From a price perspective. Interesting. Okay. Let let's actually dive in that a little bit more making decisions, because a lot of people that we talked to accountants, bookkeepers, CPAs, they don't want to make decisions because they have this sort of, this, this idea that they're not there is imposter syndrome.

Their advice is not on par where it should be. So they don't want to make decisions. But what we tell them is you're not supposed to make decisions. You're supposed to point out the problem areas and recommend solutions kind of exactly what you were referring to in the format. So how do you how do you talk or consult with consultants who are dealing with this sort of imposter syndrome, or this idea that they just are not equipped to, to guide?

Well, you know, it's interesting, and I think this probably affects accountants more than any of the other professions more. And that is this, this notion of I shouldn't be making decisions because for a long, long time that was highly frowned upon by the by the accounting profession. I think that's changed a little bit. But, I do think that I think part of it is just simply clarity of relationship, right?

If so, if you go into the relationship, you say, I'm not going to make decisions for you. I think then you're okay. I think when the expectation from the customer is that you are going to make decisions and you don't, that's where the conflict occurs. Yeah. Or or vice versa. If you start making decisions and then the customer is like whoa, whoa, whoa whoa, wait a minute.

That was supposed to be me, you know? So and that's why I think, you know, vagueness is the enemy of strategy here. Right? So and really deciding whether or not you want to be just a consultant or a surrogate manager is a strategic decision on the firm's part or on your part. If you are just an individual that is a that is a strategic decision.

It is a strategy, not a strategic plan. I think that's another thing that that becoming more and more clear in the last six months is that there's there's a grand confusion among what is strategy versus what is a strategic plan. And these things get conflated all the time, and they're very different things. A strategy is just something like that.

Am I going to be consultant or am I going to be a surrogate manager? I'm going to be different ones to different people. What's my strategy? And then the plan is how you effectuate that and put that in place in your organization. Yeah. Hey there Adam here from the Escaping the Accountants Trap podcast, I'd like to personally invite you to a free masterclass that we're conducting this Thursday called How to Start a CFO service.

To register, just go to the CFO project. Com and click Free Training at the top. See you then. We look at it as strategy and tactics. Sure, there's two different things. A tactic is not a strategy. For example, a strategy is is like a marketing strategy. How am I going to get clients? A tactic is doing Facebook ads, or maybe an AI or something to that effect.

Yeah, yeah. So cool. So in terms of, just to talk a little bit more about the guiding not doing, we're big advocates. I completely agree with what you're saying. We're big advocates for asking the right questions. Which will help the client figure out how to understand what they need to focus on. Sure. There's an art to asking the right questions versus having the right answers.

You don't need to have the right answers. You can have the right questions. Yes, I would actually agree with that. And and one of the big meta consulting ideas around question asking, also comes from, from Peter Block and his book called The Answer to How Is Yes, which is a great title. The answer to how is yes?

And in this book he, he posit something pretty interesting and that is that in most consulting opportunities, we are dealing with six and only six questions. How do you do it? How long will it take? How much does it cost? How do you get those people to change? How do you measure it? How have other people done it successfully?

That's it. It's a good all right. How do you do it? How long will it take? How much does it cost? How do you get those people to change? How do you measure it? However, other people done it successfully. Okay, now these are the questions that are often asked by the prospect or customer. Even if it's a you're right.

If it's a situation, the issue that he points out that is a consultant is that these questions are there. They're fine questions. There's nothing, you know, morally inferior about these questions, he says. But they are often and I love this point. Asked and answered too early in the process. So it's not the fact that they are just ask because the person who is who is asking is going to be because they're very practical.

All of these questions are extraordinarily practical, and people who ask them are perceived as smart, but oftentimes they are asked and answered too early. So what he does is he he proposes a series of what he calls what matters questions that are the counter remedy to these questions. So let's take the last one and say, how have others done this successfully?

This is aka the reference question, right? How have you worked with others who have done this successfully? So how have others done this successfully? That's a fine question. It's an important question. But the question that you really need to ask and answer first or more fully before you ask that is what is it that we want to create together?

Because picture, if the Wright brothers had asked the questions of how have others done this successfully on their way from Dayton, Ohio to Kitty Hawk, North Carolina? So, Wilbur, how have other people done this powered manned flight thing successfully? Well, Wilbur, I did some research in the, Dayton Library and it wasn't really good because I came up with this Icarus data, this guy and wax in the wings crashed into the river, and that didn't work out so well.

Leonardo da Vinci, perhaps the greatest mind ever designed. No less than four flying machines. But none of them get off the ground. Actually, one of them kind of hops up and down until it destroys itself on the launchpad. Oh, you're right, world, but the hell with it. Let's go back to the bicycle shop. Right. So if you ask, how have others done it successfully, you are stifling any possibility of innovation.

Yeah. You're gonna put yourself in a box, right? So if that's where you start and a lot of people do with how have others done this, whatever this is successfully, you're there's no possibility of innovation, which is frightening to me. But if you instead ask, what do we want to create together? What's what is the desired outcome? What is that?

What is the envisioned future that we have and we and we and we and we define that. Then we will probably ask the question that the Wright brothers asked themselves once they decided that what they wanted was flying machine is what can we learn from others who have attempted this? And of course the others who have attempted this and oh, by the way, did it successfully were birds.

And what they observed then was that the bird wings were what were flexible. Yeah. And would move, move with the currents and that that's where they had the idea for the wings that would, would simulate the bird wings, not fixed wing, but would move with the area lines and all that stuff. And that's where they got this insight.

But if they had focused on how have other men done this successfully, they could not possibly innovate. So black points out in these series of questions, I can recite them all, but the other six are. But I prefer the people read the book because it there's some really important things, including the what I'll do do one more quickly.

But the idea of what do you how do you measure it? Because that one there's a cult of measurement in business today. I call them Pan Tom mattress. They want to measure like absolutely everything. And because it because they believe the you know what you can measure. You can manage that that which is attributed to Peter Drucker.

He never said it. So if you ever he never, ever said no, Peter Drucker did not say that. Okay. He didn't say the opposite either. What you can't measure, you can't manage. What he said was something like this. And I'm paraphrasing a little bit, but it's more close. What you measure, you will get okay. That's different from what you can measure.

You can manage. Right. What you measure. In other words, if you measure, for example, in a professional firm hours, you're going to get hours, okay? You're going to get them. Are you going to get successful customers. Not necessarily because that's not what you're measuring. Right. So what you measure you will get. So what you so the the replacement for the for for a question for how do you measure it is what is the judgment that we need to make.

Because if you really think about it, every measurement is really a judgment in disguise. Because what we're doing is we're deciding that the thing we're measuring is the thing that's important. And I think oftentimes it's not it shouldn't be. And in some cases it can cause actual harm. Famous case, the the National Health Service in the in the UK put a measurement around that.

People were being brought into emergency rooms and weren't being seen fast enough. So they they created this rule that said, okay, every hospital in the system has to see a patient within or a patient that comes into the emergency room must be seen by a medical professional within 30 minutes of crossing the threshold. Right. And guess what they got.

They got what they got. However what they also got was ambulances being lined up outside the emergency room because since the people knew that the measurement was once they crossed the threshold, we've got to see them within 30 minutes. They left them in the line. And now you have ambulances lined up outside where people are not getting care.

And oh, by the way, now there's not ambulances available to go get other people. Yeah. Yeah. Right. So what you measure, you will get but is it the right thing to be measuring. Is it the. Are you making the right judgment about what to measure. Yeah, absolutely. And there's a lot of vanity. I mean, you're right, there's a lot of vanity numbers in in business and a lot of people measure even just to something as simple as the PNL.

80% of the PNL was taken up by low level expenses, right? That don't matter in the grand scheme of things, usually. And and one of my one of my biggest mantras about the PNL. And just because this brings in my my pricing ideas too, is that the we should take discounts, should not be taken off of revenue and then shown revenue less discount discounts should be moved all the way to the bottom line.

Because a discount is is not an expense, it is a reduction of profit. So we should the line should be profit before discounts discounts profit after discounts. Interesting. Okay. Because if you really think about it, a discount is it doesn't change cost structure at all. Yeah. Right. So it's really off the bottom line not the top line. And when you put when you frame it that way people are like oh my God.

We are giving away far too many discounts. Yeah. Interesting. That's that's a, that's a topic I would like to get into. We just don't have a lot of time for that. This is very interesting. So, so Peter Block and, you know, we're we're almost out of time, but Peter, Peter Block, what's the book that you recommend the to the two of them.

But the answer to how is yes, that's for the questions. But also his book and any of the editions. So the fourth edition is just out called, Flawless Consulting. So that would be the other one that I would recommend. Okay. The Flawless Consulting before we run out of time pricing, what is your views on how consultants and our case business advisors, CFOs should price subscription based?

Become a huge proponent of subscription? Many of I also in addition to the Sage Thought Leadership podcast, I also do one with a guy by the name of Ron Baker, who is the grandfather of the value pricing movement. But we we, we have done a show for ten years called The Soul of Enterprise. And for the last 4 or 5 years now, we've been exploring this topic of subscription based pricing, often on, on, on the shows that we do.

If you go to the soul of enterprise.com, there's the top, there's like a show topics. You can click and see all of the shows that we've done on on subscription. But I, I firmly believe that subscription puts the relationship at the center of it. If more of the of the of the that it must have been the most important thing.

So what is how how do we effectuate this relationship. And I think that's why it's more important. Yeah. Right. So subscription pricing is the thing that does that best when properly and when properly implemented. Yeah I agree because it is a the hourly billing people. Well first of all you're not charging for your value, you're charging for your time.

And second off, a lot of, a lot of, clients, customers, business owners, they don't have any insight as to why you're spending all this time doing something, so they have no idea what you're doing. I would even take it a step further. Get rid of your timesheet completely. Yeah. Jettison the timesheet. There's no reason for you to be tracking time at all.

Zero. Yeah, I do this experiment. You like this, Adam? So, I mean, I have a room full of, say, a couple hundred, accounting professionals, and I'll say, raise your hand if you've ever filled out a timesheet. And every hand goes up, right? Yeah. And then I say, keep your hands up if you've ever not put on the timesheet what exactly happened?

Either too few hours or too many hours, and every hand stays up and it was say so. And then, then some of you going to argue that you need your timesheet so you can measure actual costs.

Yeah. It's just that it's but it's not actual anything. It's optimal because you put on the timesheet not what actually happened, but either what you think should have happened or what the customer thinks should have happened, or what your boss thinks should have happened. Yeah, and that happens a lot outside of timesheets too. So time to get rid of them.

They got to go. And thank you so much for being on the show. Where can somebody learn more about you and your other podcast and sage in general? Yep. Sage.com is is the website to go to. We've got we've got lots of products in the accounting space. Probably our biggest, one that most people are interested in nowadays is sage intact, which is a fantastic sort of subscription based, you know, multi-tenant in the cloud, everything, all the bells and whistles you could possibly want from an accounting solution perspective.

But as far as me personally, if you go to Ed class.com, you'll find the links to all my other properties, including The Soul of Enterprise and Sage that leadership podcast, etc.. Very cool. So we'll put those links in our show notes. And thank you so much for being on the show today. Am I honor and pleasure. Thanks for having me.

And to everyone listening or watching, thank you so much for spending the last few minutes with us. As we discussed how to escape with counterstrike. Bye for now.