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October 2022

Episode #414: Interview with Brian Domitrovic

Ron and Ed welcomed to the show one of the co-authors of the new book Taxes Have Consequences, Brian Domitrovic. Ever since 1913, when the United States first imposed the income tax via constitutional amendment, the top rate of that tax has determined the fate of the American economy. When the top rate has been high, as in the late 1910s, the 1930s, 1940s, 1950s, and 1970s, the response of those with money and capital has been to curtail real economic activity in favor of protecting assets and income streams. Huge declines have come to the economy in these circumstances.

A bit more about Brian Domitrovic…

Brian Domitrovic is an intellectual historian interested in the history and development of supply-side economics. He is the author of six books, beginning with the now standard history of supply-side economics — Econoclasts (2009) — and extending to the history of the income tax — Taxes Have Consequences (2022 and co-authored with Arthur B. Laffer and Jeanne Sinquefield). He has been a professor at institutions in Texas and Colorado and is the Richard S. Strong Scholar at the Laffer Center in Nashville. He holds a Ph.D. in history from Harvard University.

Use these show notes to follow along with the audio…(scroll a bit further to see what a bot came up with)

Segment one:

  • Adam Smith in 1776: “High taxes, sometimes by diminishing the consumption of the taxed commodities, and sometimes by encouraging smuggling, frequently afford a smaller revenue to government than what might be drawn from more moderate taxes”

  • Who remembers this amazing scene with Ben Stein featuring the topic of Voodoo Economics? https://www.youtube.com/watch?v=X_wHBlouFSc

  • That same clip also makes reference to the Laffer Curve. Who needs a refresher on that phrase? Link is here: https://www.investopedia.com/terms/l/laffercurve.asp#:~:text=The%20Laffer%20Curve%20is%20based,in%20increased%20total%20tax%20revenue.

  • From Brian on the show today, “The Laffer Curve is a simple representation of the tax rate against tax revenues”.

  • As tax rates go up, the wealthy shelter more money and earn less income. The consequences are severe and detailed in Brian’s book, “Taxes Have Consequences” — Link is here: https://www.amazon.com/Taxes-Have-Consequences-Income-History/dp/1637585640

Segment two:

  • Ron opened segment two today with a point from Brian’s book. It doesn’t matter what you call it, aren’t all taxes effectively income taxes? From consumption taxes to investments to gifts to wealth. Shouldn’t all taxes be called income taxes?

  • Brian’s effectively lays out the argument that WWII did not end the Great Depression. Tax cuts in the 1940’s did. After hearing him speak today, it’s hard to argue against that.

  • President Wilson raised the tax rate to an unconscionably high 77% in 1918. As a result, all sorts of businesses were starved for capital.

  • The autobiography of Thomas Mellon might be Brian’s favorite business book of all time. Link is here: https://www.amazon.com/Judge-Thomas-Mellon-Founder-Fortune/dp/0300167148

Segment three:

  • Wrap your head around this: In the 1970’s in Great Britain, tax rates were upwards of 98%! I’m sure those taxes had consequences. Oh, wait. There’s a book about that. Link is here: https://www.amazon.com/Taxes-Have-Consequences-Income-History/dp/1637585640

  • “A tax system with distortions is automatically inefficient.” —Brian Domitrovic

  • Warren Buffet is very admirable in many important ways. His opinions on tax returns are public and well known. Does his secretary really pay a higher tax rate? He had $62M in income in a year when his net worth increased by billions (with a B). In short, it’s a bit more complicated than a tax rate.

  • Government based digital currently is a bad idea. Brian has never seen a soft power quite like Bitcoin.

Segment four:

  • State and local tax collections were 80% of all tax collections in 1932. The Federal government only represented 20%. This caused the housing foreclosure crisis and the banking crisis.

  • It’s amazing that we lionize the 1950s as a decade of high tax rates and prosperity. The corporate tax rate was 52%. The progressive tax ladder goes all the way to 91%. Top executives avoided taxation as a national pastime in the 1950s.

  • The official IRS figures state that 84% of taxes owed are collected. They concede that 15% of taxes are not collected. Taxes have consequences and that’s the title of Brian’s book https://www.amazon.com/Taxes-Have-Consequences-Income-History/dp/1637585640

  • A big THANK YOU to Brian Domitrovic for joining us today. “Taxes Have Consequences” is the new book and you owe it to yourself to read it. https://www.amazon.com/Taxes-Have-Consequences-Income-History/dp/1637585640

The bots are coming for us!

For a few weeks now, we have been experimenting with a new feature from Otter.ai. Many of you will know that some of the current AI solutions have caught Ron and Ed’s attention during the bonus episodes. We let Otter.ai loose on the audio version of this show and here is what it (he? she? they?) came up with:

  • Who coined supply-side economics? 0:04

  • The CFO revolution of the ’80s. 11:13

  • The Laffer Curve. 13:21

  • What about tax rates in relation to spending? Is spending really the problem? 21:53

  • The correlation between high tax rates and income inequality. 25:32

  • The idea that taxes don’t influence behavior. 29:08

  • The myth that World War 2 ended the Great Depression. 32:14

  • What caused the Great Depression? 37:55

  • What should be the ideal system of taxes? 43:31

  • The argument that we need taxation to compete with other countries. 48:06

  • Brian’s thoughts on government-based digital currency. 54:31

  • The causes of the Great Depression. 58:09

  • How tax evasion was widespread in the 1950s and 60s. 1:03:35

Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention. 

This past week was bonus episode 414 - Only people pay taxes. Here are some links discussed:

Click the “FANATIC” image to learn more about pricing and member benefits. 

Episode #413: Interview with Dr. Reginald Lee

Ed and Ron welcomed back Dr. Reginald Lee for the 6th time! He joined us for a free-wheeling discussion on a variety of topics.

A bit more about Dr Reginald Lee…

Business Dynamics & Research was co-founded by Dr. Reginald Tomas Lee in 1994 using cash-based business models he created. An engineer with a passion for business and math, Reginald is a pioneer in debunking the validity of accounting information for managerial purposes. As a replacement, he developed Business Domain Management, a mathematically sound operations and cash business framework that provides significantly more accurate and effective managerial and cash-based data and information than accounting. His work has proven valuable in helping leaders see, understand, and manage their operational and cash performance. In addition to his work at BDR, Dr. Lee is a professor at Xavier University's Williams College of Business. Previously, he has worked for a number of major global brands including EY, GM, IBM, and Oracle. In addition to teaching business at Xavier, he has also been a professor of industrial engineering, mechanical engineering, and business at other schools, most recently, Miami University's Farmer School of Business. Dr. Lee is the author of five books, Project Profitability: Ensuring Improvement Projects Realize Maximum Cash ROI, Strategic Cost Transformation, Lies, Damned Lies, and Cost Accounting, Essentials of Capacity Management, and Explicit Cost Dynamics. He has two books under contract: Essentials of Managing Capacity, and Engagement Economics: Planning and Managing Engagements to Improve Cash Profitability

Use these show notes to follow along with the audio…(scroll a bit further to see what a bot came up with)

Segment one:

  • “Lies, Damn Lies, and Cost Accounting” is still the best title of any accounting book. Let’s all thank Dr. Lee for it! Link is here https://www.amazon.com/Lies-Damned-Cost-Accounting-Management/dp/163157065X

  • A question posed recently: “Without time sheets, how do we know we did it profitably?” What we really need to answer is how are we defining profit? 1) Did I make money? Or 2) From an accounting perspective did revenue generated exceed the costs?

  • Dr. Lee looks at capacity as being a key component to managing cash — people, labor, materials, space, technology, and so on. When doing work, you should be able to estimate the consumption requirements in order to deliver the work.

  • In the book, “Strategic Cost Transformation”, Dr. Lee breaks down business into two domains: the operations and cash domain AND the accounting domain. More here: https://www.amazon.com/Strategic-Cost-Transformation-Business-Management/dp/1631578790

  • “Accounting costs are arbitrary.” —Dr. Reginald Lee. There’s no relation between what you pay a person and the work that they do.

Segment two:

  • Accounting profit is a dangerous metric. If you think profit is money, then you might rationalize the wrong things in your business.

  • If you create incentives through inter-departmental allocations for orgs to not work with each other then what are the negative ramifications? How is that good for doing business? It makes it easy from an accounting business but might not be right for the actual business.

  • During segment two of the show, Dr. Lee asked how regulations are working out for us and if it helps to improve business. He wondered (with chilling effect), how many companies just give up?

Segment three:

  • Another recent question: “How do we manage staff utilization when we can’t see them?” That’s like trying to find a gas tank on a Tesla. Managing the staff isn’t the issue. The issue is getting the required output.

  • “With benchmarking, how I choose to calculate the benchmark metric and the data I use to calculate the metric is going to be different company by company.” —Dr. Lee

  • It’s no fun to do benchmarking or look at best practices (which is just copying). Let’s figure out the best way to do business and be better than everyone else.

  • The Theory of Constraints was mostly derived from a book called “The Goal” by Eliyahu M. Goldratt. More here: https://www.amazon.com/Goal-Process-Ongoing-Improvement/dp/0884271951

Segment four:

  • As a professor, what is Dr. Lee’s perception about his student’s overall attitude towards business? His experience has been pretty positive and it excites him. There is a level of curiosity that he helps to grow.

  • What does Dr. Lee think about Six Sigma? It has its place but people think it’s place is much bigger than it really is. Things go sideways when focusing on things like cost savings based on Six Sigma team successes.

  • People come up with huge savings using SS but if you go back and question if they really saved $40M in operational costs as a result, the answer is probably no.

  • A huge THANK YOU to Dr. Lee for joining us today! Check out his many books here: https://www.amazon.com/Reginald-Tomas-Lee/e/B001HCWBO8/ref=dp_byline_cont_pop_book_1

The bots are coming for us!

For a few weeks now, we have been experimenting with a new feature from Otter.ai. Many of you will know that some of the current AI solutions have caught Ron and Ed’s attention during the bonus episodes. We let Otter.ai loose on the audio version of this show and here is what it (he? she? they?) came up with:

  • Good day to you, Greg! 0:03

  • Where are they going to put it? 3:30

  • Introduction to this episode. 6:44

  • How do you know if a business is profitable or not? 12:11

  • How can we improve through the after-action review? 17:16

  • The biggest roadblock for entrepreneurs today is dealing with government. 24:05

  • It’s all about free cash flow 28:51

  • What if we know that people are not telling the truth on their times? 32:11

  • How are we in a pro-business type of environment while we’re creating barriers for companies to be able to do business? 35:29

  • How do we manage staff utilization when we can’t see them? 39:34

  • What’s wrong with benchmarking? 45:13

  • What are you seeing with regard to students coming through school with a positive attitude toward business? 52:48

  • When the real world resonates with your students. 57:47

  • How do we organize the work to get it the most effectively through the system? 1:03:08

  • What do you think about Lean? 1:06:25

  • Is supersonic flight going to happen again? 1:12:23

Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention. 

This past week was bonus 413 - Green jobs gone. Here are some links discussed:

Click the “FANATIC” image to learn more about pricing and member benefits. 

Episode #412: Interview with John Farrell, The Clock and the Camshaft

Join Ed and Ron for a discussion with John Farrell, author of The Clock and the Camshaft: And Other Medieval Inventions We Still Can’t Live Without.

A bit more about John W. Farrell…

John W. Farrell is a writer and producer working in Boston. He is the author of The Day Without Yesterday: Lemaître, Einstein and the Birth of Modern Cosmology from Basic Books, and The Clock and the Camshaft: And Other Medieval Inventions We Still Can’t Live Without, just out from Prometheus Books. A graduate of Harvard College with a B.A. in English and American Literature, Farrell has written for Commonweal, Aeon, Skeptic, Cosmos Magazine, New Scientist, The Wall Street Journal, The Guardian, The Boston Globe, Salon, National Review, Forbes and The Tablet of London. His fiction has appeared in Dappled Things, his poetry in Penwood Review and First Things, and he is a longstanding member of Boston’s creative writing community at Grub Street.

Use these show notes to follow along with the audio…(scroll a bit further to see what a bot came up with)

Segment one:

  • So what are we talking about with John today? His new book is called “The Clock and the Camshaft: And Other Medieval Inventions We Still Can't Live Without” https://www.amazon.com/Clock-Camshaft-Medieval-Inventions-Without-ebook/dp/B07P9MQFPS

  • In the case of farming tools, many breakthroughs were “breakwiths”. People would pick up tools nearby and repurpose them in ingenious ways starting with the fall of the Roman Empire.

  • One thing John discovered while researching his book is that humanity had the hand crank for quite some time. Then it sort of disappeared and THEN showed up again a few centuries later. More in his book: https://www.amazon.com/Clock-Camshaft-Medieval-Inventions-Without-ebook/dp/B07P9MQFPS

  • Let’s talk about the evolving camshaft. It was probably used earliest in China and then in the Roman Empire, the camshaft eventually was picked up by a Muslim scientist and continued to spread. The inventor is likely lost to history.

Segment two:

  • John defines technology in quite a cool way: Tools and techniques plus practical skills AND knowledge needed to invent, manufacture, and improve upon things.

  • Watermills were initially put together from pieces of constituent parts used for farming. Not only were the original mills used to power other tools, they were also used to help drive water out into fields for irrigation especially in the Middle East.

  • More often than not, large tools after the fall of the Roman Empire were simply too expensive for an individual and required public investment from the community.

  • While the horse ultimately replaced the oxen, horses required significantly more maintenance. They were initially adopted by feudal lords and monasteries — in other words, those who could afford them.

  • The camshaft is the first example of programming in human history. Depending on the mlll you were developing, the way you positioned the cams allowed you to time the hammers.

Segment three: 

  • Chapter 7 is John’s new book is called “From Greek to Arabic and back again”. It talks about one of the Medieval translation movements and how many of the Classics (such as Aristotle’s works) were almost completely lost. https://www.amazon.com/Clock-Camshaft-Medieval-Inventions-Without-ebook/dp/B07P9MQFPS

  • The fact that everyone could speak Latin along with the return (and translation) of many of the Classics directly resulted in a scientific revolution in Europe.

  • It seems that we had some knowledge of lenses for quite a while but it was some time until we arrived at eyeglasses. For years, people would use a natural ball filled with water as a reading aid!

Segment four:

The bots are coming for us!

For a few weeks now, we have been experimenting with a new feature from Otter.ai. Many of you will know that some of the current AI solutions have caught Ron and Ed’s attention during the bonus episodes. We let Otter.ai loose on the audio version of this show and here is what it (he? she? they?) came up with:

  • Ron’s book orders are up. 0:02

  • Introduction to the show. 4:04

  • What’s next for the podcast? 5:58

  • Introduction to John Farrell. 8:04

  • What are some of the breakthroughs in medieval technology? 11:25

  • The evolution of water-powered mills. 15:42

  • Sponsor: Melio, an accounts payable solution. 22:22

  • How much of medieval technology still comes down to the modern day and how much of it comes from the caveman. 24:38

  • Horses as the primary draft animal in the Middle Ages. 31:12

  • Sponsor: 90Minds.com. 37:46

  • The Re-conquest of Spain. 41:05

  • The dangers of inventing in the Renaissance. 47:47

  • How the Romans were more innovative than the Greeks, and why the Greeks were ashamed of innovating. 52:28

  • The Cathedral Crusade and how it was financed. 59:36

  • John’s other book, Day Without Yesterday. 1:02:57

Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention. 

This past week was bonus episode 412 - podcast.ai. Here are some links discussed:

Click the “FANATIC” image to learn more about pricing and member benefits. 

Episode #411: Interview with Nicholas Eberstadt

Current low rates of unemployment, touted by pundits and politicians, are grievously misleading. The truth is that fewer prime-age American men are looking for readily available work than at any previous juncture in our history. Ron and Ed spoke with Nicholas Eberstadt, author of Men Without Work: Post-Pandemic Edition. In addition to the book, they also talked about Nicholas's other area of expertise, North Korea.

A bit more about Nicholas Eberstadt…

Nicholas Eberstadt holds the Henry Wendt Chair in Political Economy at the American Enterprise Institute (AEI), where he researches and writes extensively on demographics and economic development generally, and more specifically on international security in the Korean peninsula and Asia. Domestically, he focuses on poverty and social well-being. Dr. Eberstadt is also a senior adviser to the National Bureau of Asian Research (NBR). His many books and monographs include “Poverty in China” (IDI, 1979); “The Tyranny of Numbers” (AEI Press, 1995); “The End of North Korea” (AEI Press, 1999); “The Poverty of the Poverty Rate” (AEI Press, 2008); and “Russia’s Peacetime Demographic Crisis” (NBR, 2010). His latest book is “Men Without Work: Post-COVID Edition” (Templeton Press, 2022).

Use these show notes to follow along with the audio…(scroll a bit further to see what a bot came up with)

Segment one:

  • First published in 2016 and then updated post-covid, Nick’s book talks about how American men are suffering depression-era unemployment rates. It’s called “Men Without Work” https://www.amazon.com/Men-Without-Work-Post-Pandemic-Threats/dp/1599475979

  • 7 million or more American men have dropped out of the workforce. This is the biggest distinction between depression-era unemployment and today. You’ve got to look in the shadows to see the effects today because there are no breadlines, per se.

  • The received wisdom has been that unemployment is due to a skills shortage. There’s some truth to that but it doesn’t get at the whole story. HELP WANTED signs are everywhere and they are looking for low-skilled applicants. So it’s not just a skills shortage.

  • So how do 7 million or more unemployed American men sustain themselves? It’s hard to tell directly but definitely includes government assistance in the form of disability programs, family members, and moonlighting gigs.

  • Nick mentioned the “flight from work” today on the show and has a GREAT article at AEI on this very topic. More here: https://www.aei.org/op-eds/whats-behind-the-flight-from-work-in-post-pandemic-america/

  • Nick coined the term “archipelago of disability”. They do not provide for a princely life but do have a negative impact on economic productivity in the United States. More here: https://www.wsj.com/podcasts/opinion-free-expression/the-decline-of-men-in-the-workforce/b2e11b0d-5ec6-4652-a974-5a2ede320760

Segment two:

  • “Watching something” is one of the most common traits amongst the under or unemployed 7 MILLION plus American men we are discussing with Nick Eberstadt today.

  • In Nick’s book — “Men Without Work” — he talks about how the US Government accidentally stumbled upon Universal Basic Income with payments made during Covid.

  • As a measure of GDP and overall economic performance, corn and steel were relatively easy to measure. However, with so many in the service sector now it is much harder to measure “hours worked”.

  • So who are these “Men Without Work”? They are NILFs — Not In Labor Force. They are 25-54. African Americans are overrepresented. Latinos are underrepresented. The less educated are overrepresented. Never married? You are more likely in the pool. The foreign born — regardless of ethnic group — are way underrepresented.

Segment three: 

  • So what if 7 million American men have dropped out of the workforce? America is rich. What’s the harm? The harm is slower economic growth, bigger wealth gaps, more dependence on social welfare, more public debt, more pressure on family, and less trust on our institutions of basic life.

  • Since 2000, labor force participation rates for women have been going down. There is a group of women not in the labor force, not currently married, and not with children at home. It’s not as severe as “Men Without Work” but is growing.

  • There are some feasible solutions: 1) Bulking up on vocational skills, 2) Reinventing our disability insurance system so as not to incentivize helplessness, and 3) Paying attention to the 20M+ ex-cons in America. They want to be back at work and accepted members of society.

  • A great recommendation from Nick Eberstadt today! Charles Murray’s book “Losing Ground: American Social Policy” is a great example of changing politics in a very positive way. https://www.amazon.com/Losing-Ground-American-Social-1950-1980/dp/0465065880

  • At the end of segment three today, Nick Eberstadt told the story of Mollie Orshansky. she developed the poverty thresholds that became the federal government's official statistical measure of poverty.

Segment four:

  • From Nick today: The unintended consequence in the real world of “ban the box” means that employers will assume criminality of those coming from a disadvantaged background.

  • Getting rid of overall occupational licensure requirements “looks like low hanging fruit” to Nick. We need to look at public safety vs collusion and cartel in licensing.

  • Nick is an absolute expert on North Korea. He thinks the NK government is unconditional about wanting to absorb the entire peninsula. Given their economic failure, this requires a nuclear arsenal to drive out the allies of their adversaries.

  • The book is Men Without Work and the author is Nicholas Eberstadt. Thank you VERY MUCH for joining us today and sharing your wealth of knowledge and experience. More on the book is here: https://www.amazon.com/Men-Without-Work-Post-Pandemic-Threats/dp/1599475979

The bots are coming for us!

For a few weeks now, we have been experimenting with a new feature from Otter.ai. Many of you will know that some of the current AI solutions have caught Ron and Ed’s attention during the bonus episodes. We let Otter.ai loose on the audio version of this show and here is what it (he? she? they?) came up with:

  • Introduction. 0:00

  • The tyranny of numbers and consumption. 4:37

  • Introducing Nick Eberstadt. 7:08

  • What is the impact of social welfare on the unworking class? 13:28

  • What’s going to happen to the age for disability? 23:21

  • Is the number of people working from home going to mess with your numbers of hours worked? 30:15

  • Marital status is becoming more important to men than women. 34:27

  • Three areas that society should pay closer attention to in New York. 40:06

  • Are you optimistic about these trends? 45:15

  • You can’t just look at income to determine standard of living, you have to look at consumption. 50:07

  • Would getting rid or modifying the infamous “Have you been convicted of a felony?” checkbox be helpful? 55:22

  • The North Korean government’s only option is a new nuclear arsenal to make Uncle Sam blink. 59:24

  • The world as told by Charles Murray. 1:04:27

  • What’s going to happen in North Korea? 1:09:00

Episode #410: Interview with David Leary

Ron and Ed were thrilled to welcome David Leary, co-host of The Cloud Accounting Podcast to this past week's episode to talk about various and sundry issues facing the accounting profession. We included a conversation (read diatribe) about LEAN Six-sigma and how it ruins companies.

A bit more about David Leary…

David Leary is an innovative and influential force in the small business accounting world. With over 22 years of QuickBooks experience, David has provided many small businesses, accountants, and developers with technical tools, deep industry knowledge, strategy, and solutions. His business sense, vast technical knowledge, and domain expertise have helped bridge the gap between developers, small business owners, and accountants. His unique style and impressive network have influenced and helped shape the new generation of accounting professionals.

  • Named one of the "40 under 40" honorees by CPA Practice Advisor in 2014

  • Named by Accounting Today as a "One to Watch" in their Top 100 Most Influential People 2015 issue

  • Current Top 10 ranking in Avalara's "The Accounting Top 100" social media leaderboard

  • 21+ year career at Intuit

  • Principal Technology Evangelist at AutoEntry

  • President and Founder of Sombrero Apps Company

  • Co-Host of the Cloud Accounting Podcast

Use these show notes to follow along with the audio…(scroll a bit further to see what a bot came up with)

Segment one:

  • Thank you to our guest today — David Leary — for being the impetus behind the creation of The Soul of Enterprise Patreon page! He wanted a way to listen without the commercials and we delivered for him. Check it out at Patreon.com/TSOE for the details.

  • David is the co-host of the Cloud Accounting podcast along with Blake Oliver. It is the number one accounting, bookkeeping, and tax podcast in the world!??! It is a summary of the week’s news in the accounting industry. https://www.cloudaccountingpodcast.com/

  • “Hey, the Cloud Accounting Podcast is so valuable. Can I get CPE credit for listening?” That’s when Blake and David started their journey towards Earmark CPE and the answer today is, “Yes. You can get CPE credits for listening to a podcast.” https://earmarkcpe.com/

  • For many, the podcast format is just a better format for learning. There are lots of exciting things happening that will make podcasting even better with the advent of Podcasting 2.0. Here’s an article with some of the details: https://9to5mac.com/2022/06/26/podcasting-2-0/

  • Podcasting has a fascinating backstory that involves one of the very first MTV video deejays — Adam Curry. Read more here: https://internationalpodcastday.com/podcasting-history

Segment two:

  • David worked for a CEO, formerly of GE, who was fanatical about implementing Six Sigma. That company almost died as a result. Name that company? I’ll help you…..Intuit.

  • Six Sigma is largely focused on eliminating waste. That’s great for a manufacturer but what about a knowledge worker in a software environment? “Everybody became very specialized and made decisions for themselves” —David Leary

  • To be clear, Lean Startup is the opposite of (Lean) Six Sigma. It’s almost like the Six Sigma folks co-opted the word Lean to create market confusion.

  • Just like Starbucks, it took a founder to return to his roots in order to help save Intuit from Six Sigma. Incorporating the DNA of the book, Lean Startup, is what helped turn them around.

Segment three:

  • While at Intuit, David knew that the way they launched products was wrong. He just didn’t know what the right way was and that’s when he discovered The Lean Startup http://theleanstartup.com/

  • You iterate, you listen, you fix. Rinse and repeat. That’s the core of what David took away from The Lean Startup when launching new products.

  • David still uses several principles The Lean Startup today. He takes phone calls and talks to customers. He doesn’t rely on a significant budget to launch tests. He recognizes the value of testing LIVE in the app itself.

  • “Six Sigma is designed to take human judgement out of the equation.” —David Leary

  • David does recognize some pitfalls to using Lean Startup principles: It’s a science and an art. There is a formula, yes. But you need to interpret things as well which is where the art comes in. It requires judgement and interpretation.

Segment four:

  • How is innovation going in the accounting space? For David, he sees a need to improve the overall client experience. There is a portal to upload documents, a separate payments system, and various other disparate requests placed on him from accounting firms

  • The biggest challenge facing the accounting profession is talent. “I’ve talked to firm owners and they almost have to solve for employees first over customers just to keep them.” —David Leary

  • What does remote work do for the accounting space? For a decade the whole profession said, “We can’t do remote work.” — and then it changed overnight and nothing fell apart.

  • The biggest opportunity for the accounting profession is customer service. The next generation wants a mission driven company. Your mission can simply be, “Our customers get great service.”

  • A big THANK YOU to David Leary for joining us today. Check out his podcast with Blake Oliver — The Cloud Accounting Podcast — at this link https://www.cloudaccountingpodcast.com/

The bots are coming for us!

So we ran a little experiment with this show and let an artificial intelligence note-taking app create the show notes for us. Here is what it (he? she? they?) came up with:

  • David joins the show at 0:07

  • Introduction to today’s guest, David Leary at 8:54

  • What does segmentation do for the cloud accounting podcast? at 11:54

  • What are some of the new tools that you’re seeing with podcasting? at 16:14

  • David shares a story about how his previous employer was almost killed by a former GE executive who was fanatical about implementing Six Sigma at 23:33

  • Lean is about speed, and 6 Sigma is about quality at 28:45

  • Lean startup vs Lean Six Sigma at 31:06

  • What happened to Starbucks after they lost the founder at 35:07

  • How he got started in tech support at 39:54

  • The importance of listening to your customers at 44:07

  • What are some pitfalls to watch out for when using lean? at 48:30

  • What’s going on in the accounting world at 52:45

  • Why do you need an accountant? at 56:15

  • Next week on The Soul of Enterprise, we have Nicholas Eberstadt at 1:03:12

  • David’s experience with a VW dealership.