As an author, consultant, business coach, and national speaker, Joe has trained over 100,000 accounting and business professionals in areas of practice development, changing technology trends, strategic consulting, and how to maximize the use of accounting software in their practices.
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Ron Baker
We're doing our second interview with accounting thought leader Joe Woodard. Hey Ed, how's it going?
Ed Kless
It's tough. It's a tiring week, Ron that a tiring week had a little travel. I've done like three webinars and recorded like eight podcasts, including for earlier today. So I'm like talked down. So I'm gonna let you just run with this.
Ron Baker
What Why did you put a bunch of sage podcasts in the can?
Ed Kless
I did. Yeah, yeah.
Ron Baker
Yeah, even though they're short. That's, that's a lot of work.
Ed Kless
Yeah, no, it's talking to a lot of people, though. And one was an extended version that we're doing so that’s cool.
Ron Baker
Okay. All right. Well, let me introduce Joe Woodard here before I bring him in. And because he's got an incredible bio as an author, consultant, business coach and national speaker. Joe is trained over 100,000 accounting and business professionals in areas of practice development, changing technology trends, strategic consulting, and how to maximize the use of account software in their practices, has been named on accounting today's top 100 most influential people at least six times. And in 2008, he was recognized by CPA practice advisor is one of the top 40 up and coming thought leaders under the age of 40, which drives me crazy. Joe is the CEO of what are the events LLC, which includes education, coaching resources, and a community for small business advisors and small business owners within the accounting industry. Welcome, Joe.
Joe Woodard
It's good to be here. Good to be here.
Ron Baker
Welcome back. I should say I only say thought leaders under the age of 40 drives me crazy, because you know, once you once you're over the age of 40, your innovation curve is dead. You do know that? Right? Yeah.
Joe Woodard
Well, if you're doing the math, I got that award about 12 years ago. So that kind of
Ron Baker
okay.
So bad, but barely. Okay, so that's your equivalent of the high school photo on the website. Okay. Yeah, there you go. Gotcha. Well, listen, I, you have a great vision on your website. And I know that you worked on this at a place that we both had the honor of attending. And I'll let you tell that story. But I just want to read your vision, because I do think it's powerful. It's to transform small business, through small business advisors. And I just love that, how'd you come up with that?
Joe Woodard
Well, I came up with that through a journey through the Disney Institute. And the Disney Institute said that your vision, not your vision statement, your vision is the intersection of three things who you are, the higher principle you follow, and the change that you want to see in the world. So then they sent us through this exploration of those three things, and we would come back with something and it would be weak, and it would be thin, or it would be too wordy, and then they would send us back in. Until finally, what emerged was not what you just read, what emerged was about a 15 word version of that, that I slowly down over the course of the a couple of years to as essential elements. And it always strikes me when I hear it read back to me how simple it sounds to transform small business or small business advisor sound like something I should have been able to write in the back of a taxi cab between appointments in New York City. But in truth, it was forged out of a multi year process that is the fusion of my personal and business ambition.
Ron Baker
Right? Yeah, it's interesting, isn't it, how our whys or our purpose, whatever you want to call it taps into that part of our brain that can't process language. So coming up with this is really difficult.
Joe Woodard
It is it is especially if you're going to treat it as a compass point, C, and that was one of the guidelines that would come back. And they would say if you're going to dedicate your entire life to this, never arriving at it, but always marching toward this direction. Are you going to be fulfilled? Are you going to have purpose? And then Oh, no. So let's go back. And let's start writing again. And I think that's the most important thing, the biggest misunderstanding with vision is people think you can accomplish one, or that you're supposed to accomplish one. Now, some visions have actually been accomplished, and in which case, those are herculean moments in human history, but more times than not, or even you could say by its very design, a vision statement is supposed to be a magnetic north. And not when I'm teaching this always say, you know, have you ever traveled to magnetic north? Is it? Is it a destination, a place where you want to go hang out with your family on a summer vacation? No. But until the age of GPS, it was the most important single place on the planet. Because it was it was that point by which everybody steered their journey. So I always test. Say, for example, we're an event company, we do a lot of training. If General Motors were to come to me tomorrow and say, we're doing a big gala for the brand new Corvette. And here's the $300,000 throw the gala for us, you know how to throw a party? I would have to say no, because it has nothing to do with transforming small business through small business advisors. Now, if it's a middle aged small business advisor, male in mid age crisis, maybe it can transform them, but that's about the closest you're going to get to my vision Not gonna happen. Or maybe Batman, it could transform Batman, but
Ron Baker
I love it. It's aspirational. Yeah. Something
Joe Woodard
or it's not. And one of my favorite teacher says that opportunity does not equal obligation. And the only way to discern between opportunity and obligation is the vision.
Ron Baker
What Disney Institute course Did you take Do you remember,
Joe Woodard
I took the one on branding. And at first I felt like it was a bait and switch because I thought they were going to help me create a logo. Tell me tell me what branding actually is. and branding is a story. A story with integrity. That is born out of the intersection of the higher principle you follow the change you want to see in the world, and who you are. And so that so when it's when it's none of those things, when it's not a story, when it's not a pervasive story, when it's not a story that is true to who you are as a person that begins to show people can actually spot it on the surface of that they don't know why it lacks integrity or depth. But they instantly see that and it doesn't resonate.
Ron Baker
Sure, sure. Did when you attended Disney Institute. Was that was that down in Florida? Yeah, I went down to Florida. Yeah, me too. I attended their customer loyalty program that Disney way back in 97. And I tell people, and I think it's really true. It's it's some of the best education I've ever had literally. Yeah. Yeah, it is really good stuff. So I wanted to ask you just some macro issues about the profession. But this all so ties into what you've been talking about a lot. Your theme about you talk about the Rise of the Machines. And we've we've had you on, we talked about the future of the professions book by Daniel and Richard Susskind, and AI, deep learning bots, all of that the automation of the profession. But you talk about the answer to the Rise of the Machines is the rise of the advisor.
Joe Woodard
That's correct, or the rise of the human. Right, right, exactly either way. What I tend to take a very positive outlook on the Rise of the Machines, I don't tie in to the more Terminator kind of approach. Or even in the alien series, you know, where, where the human being becomes denigrated to somehow the service of the machine. Of course, there are bazillion Star Trek episodes about this, this whole idea of have we diminished, we diminish when the robots begin to overtake us it intelligence or capabilities. And the Star Trek saga, the the next generation did a great job. juxtaposing data with the humans that with which, with whom data interacted he was smarter than they all are stronger than they all were, he eventually even began to understand the emotions that they all felt then feel the emotions that they all felt. But somehow he never did achieve certain things that his crew mates had, and I thought was masterfully told. But it's also a parable for us that the machines are there to enhance us. Okay, and the what is the US that is enhanced look like? I think it's a more liberated us, I think it's an us that can focus more on the the, rather than the survival elements of economy, we can focus on the creative elements of the economy, more than on the the grunt work of client relationships, we can focus on the growth areas and the consultation of areas of client relationships. So if the machines can take care of the things that are lower in value, it liberates us. So I tend to think in the in the optimistic view, that the Rise of the Machines is going to usher in an age of creativity, extreme economic rival, and if that's such a word, Jason bloomer would say it is, and, and a renaissance of art and creativity.
Ron Baker
Yeah, yeah, we like to call that magic work rather than logic work. Yes. And and that's great. And you also talk a lot about relationship workers as part of the transformative advisor, the human advisor, this idea of, you know, we're relationship workers. And to get really specific, how do you measure the efficacy of a relationship worker?
Joe Woodard
Yeah, so relationships are measured in mutual benefit. And, you know, we greater somehow than the sum of our parts, right, or two friends stronger than if they were by themselves, or they two interdependent people as covey would say, that are interacting in some way that is a win win, always win, and accomplishing something they couldn't do by themselves. Relationships suffer, we're going to get to the business application of this in a minute when it's to what it's not two independent people who are interacting with each other. So you have a codependent relationship, or you have someone who is always predominantly doing the giving, the other person is predominantly doing the taking, that creates an enablement that allows them to live through life. And I would just refer everybody to the the Seven Habits of Highly Effective People for for the study of that. But in a business relationship, it comes down to the increase in wealth. If, if I am a religious successful relationship worker, I leave my client or I wouldn't say leave, because I may be coming alongside for the whole of a journey, right. But by interacting with my client, my client is wealthier than if I did not interact with them. But catch or caveat, that wealth may or may not be financial, right? It could be infrastructural, it could be cultural, it could be a social, it, it could be in terms of their ability to scale, it could be in the valuation of the company, rather than the cash position of the company. It could be a long term trajectory toward wealth, rather than an immediate return of wealth. However, its measured as long as the client perceives it, then the client will pay for it. But not there wasn't when they're not when they're paying for is ultimately not an outcome, but they're paying for is ultimately the relationship.
Ron Baker
Right. I love that. Because, you know, we talked last week when we had George Gilder on about the idea of the customer doesn't care how much time we spend on something, what really matters. And we should make the customer do a timesheet, because what one of the things we can do to enhance our wealth is increase the time may have to pursue what they want to do when they want to do it. And that's a form of wealth. It's not necessarily quantifiable, but its massive.
Joe Woodard
Can I tell a duck story?
Ron Baker
Right, so we got one minute, but go ahead. This
Joe Woodard
is a one minute duck story. All right. Oh, I went to the county fair. And there was this guy. These make these wonderful, beautiful little handmade, handmade ducks. And he put him down in this little battle water. And they dumped in the bob Didn't they did all you know, it's just the cutest little thing, wind him up, let him go. I'd never seen a little duck like that. Because he invented it was his design. It was differentiated. I also had an immediate need, we were going to a birthday party. For a small child, they needed the duck couldn't find anything like this anywhere in the world. I asked how much he said $20 I pulled out $40 said give me two ducks. While the money's in my hand, he starts going through why the ducks are worth $20. And everything he describes is how much time it takes how long the varnish has to set, how long he has to you dry the wood? How long? And I mean, he's already made the sale. And he's trying to resell me based on the effort that I could not care less if it took him five seconds to make the duck. I just wanted the duck.
Ron Baker
Right, right. What was great, great illustration of the labor theory of value and why it's wrong. Exactly why we focus on the wrong things. Well, Joe, this is great. I know Ed wants to pick up and ask you a bunch of questions with folks. In the meantime, I'd like to remind you if you want to contact that or myself, send us an email to ask tsp at various age calm, go out to iTunes and give us a rating that helps the currency of the show and helps us get guests like Joe. And now we want to hear from our sponsors.
Josh
All right, good.
Ed Kless
Night. Cool.
Ron Baker
Good stuff, Joe. I don't think I ever asked you which Disney course you took. I didn't realize they had one on branding.
Joe Woodard
I think they're all kind of the same course underneath.
Ron Baker
Could be
Joe Woodard
different rapper.
Ed Kless
Somewhat someone say that, that, that Ron, and my material has really the same course under, you know, that they're there perhaps was a day when that was the case. But um, alright, cool. So I'll I'll uh, I'll pick up on this, Joe. And I mean, you've got me intrigued, of course, I want to find out what you've changed your mind on. So I'm just going to go there first to sort of to get that get that done. It did. I don't know front. But we do have Daniel Susskind coming back on. And he's got another book coming out. So we're pretty excited about that.
Joe Woodard
Oh, fantastic.
Ron Baker
Yeah, it's called the end of work. And he's very pessimistic. He's not he doesn't. Yeah, does not share our attitude that AI is compliment. He thinks they're substitutes to humans. Right. I have a big problem with but Oh, wow.
Ed Kless
Oh, and just a quick reminder that our bonus episodes that we put on our Patreon site, Joe are part part of it is this conversation. So thank you. So just Just so you know, there's a limited number of people who will hear it, but other people will hear this conversation. So I would first like
Ron Baker
to remind anybody, you know, don't say anything that you wouldn't want public.
Ed Kless
As my as my rule with it all the time. Yeah.
That's right, it's a good way to assume that your email will be sent to everyone at Everyone calm.
Josh
We're coming back.
Announcer
You are tuned into the soul of enterprise with Ron Baker and Ed class. To find out more about our show, visit us on the web at the soul of enterprise.com. You can also chat with us on Twitter using hashtag ask TSOE. Now back to the soul of enterprise.
Ed Kless
Our guest today on the soul of enterprise is Joe, wouldn't he Joe is lead I like to call a recidivist guest, your recidivist, Joe, this is your second offender. And, and what and what I wanted to talk to you about you've got me intrigued because before before we started recording the show, Ron said, you know Joe has changed his mind on a couple of things since he's been on our show last, and I went back in the last year on the show in December of 2016. So it's little less than three years. And Ron and I subsequently have done a show on changing our mind. And one of the things that we we talked about in that show is that changing one's mind does not does not happen overnight, right that if your mind is changed by me talking to you for five minutes, your mind isn't very strong in the first place. Right? You're very easily fallen under the influence of somebody. But I think enough time has elapsed that you have changed your mind on a couple things. So I want to know what what is it that you've changed your mind on?
Joe Woodard
Well, they're really two sides of the same coin. But when I was I was back on it in 2016. I said you should not bill for time, but you should track time because time is a good internal measurement of productivity of whether or not you're on track on budget with, with your work with the job and so forth. And I remember you were so kind you said, Well, we will agree to disagree. And, and you you actually didn't say anything beyond that you can fight the elder or anything like that just move along. And then um, but what's changed is I've ceased to see that as net value. Now I'm not going to say that in certain reports, it might not be fun. Okay, it might not be an interesting little graph to place up how much time it took versus how much money but but here's the problem. At first, there's limited value and any graph that you would place up that way. But what you lose was the focus on what really measuring what really matters. So as I was tracking time, in order to determine how much time it took for somebody to generate X amount of revenue or X amount of outcome, everything became time obsessed. So did I remember to start or stop the time clock? Did I start or stop it when I went to the bathroom? Do I burden it with time that is out of the office if the person is sick, and it takes a longer time in terms of duration on a project? How do we track that against the amount of actual time they worked the project. And and first time the variables were many seconds, they were often irrelevant to the outcome. And third, it took way too much time to track them, which means they were a massive distraction. And so I simply stopped doing that all together and told my team, get the job done, get a jump to get it done well, and we're going to measure the quality of the outcome of what you've done. And then, you know, was that the deliverable to the client? Do we over deliver under deliver? Or do we deliver right on track? And often that can be determined by if they buck you on the price that you quoted to them or not. And then whenever I started teaching this to accountants, the most common The most common objection I would get is, if I don't track time, how do I know which clients are are the troublesome clients? How do I know which clients I need to let go so that I can make greater profits and i and i can service more clients better. And I told them, and I can't remember if it was one of the two of you that said this or if it was somebody else I was listening to once but I said let them fire two clients per year. And they will tell you which clients they will fire the two clients that they know are the biggest problems. You don't even have to measure that. They live on the ground they see it.
So there you go. That's changed my mind number one.
Ed Kless
Okay, well, let's let's just explore that for another little bit. Maybe we can even push you further down the down the road on this. But But yes, you're you you've you've come into alignment with a lot of the thinking that that Ron and I have done over the years on this. And you're exactly right. We one of the exercises that we have have had people do in our classes is go through the the this what is the cost of tracking time? What is the cost of the time and billing system of pushing these transactions through your system? And in every place? We've done it What does it run somewhere between five and 10%? is where this comes out with. So we're like, oh, you want to increase profit by 5%. Get rid of your time sheets are pretty simple. Right? That would just we'll just remove that right away. But the probably the even more important thing that you've discovered, and this is where we get into, you know, Peter Drucker logic, you know, Peter Drucker, he would, and Ron and I are fine if you want to track your own individual time, because it's a value to you to decide whether you're spending much time with your kids or whatever you're doing, by all means, right? If you want to do that, but it does it matters not a lick to anybody else. But you.
Joe Woodard
Yeah. And I would say even for me, I would much rather measure still the outcomes, does my daughter feel loved? Does my wife feel loved. And I'm not going to go back to my wife whenever she says, I really just don't feel loved and pull out of time sheet. And not quite first is not going to help seconds probably gonna hurt. And so I you know, so it comes down to, I've been putting a lot of emphasis lately on the value of attention. And then I've looked at what people have been saying, when they say time, and realizing they really mean attention. You know, I want more of your time as a spouse. Okay, I've been sitting on the couch right next to you for the last four hours reading a book, you've had me here, you've had my time know, what I want is your attention. Okay? And what the client wants is our attention. And sometimes attention can be as simple as I'm in their Slack channel or a number of Microsoft Teams. Or I could just shoot them an email or something and say, okay, we talked about these four things last week, how are they going, that that takes 1015 seconds to do we get they have my attention. And while remaining real and while remaining personal. You can even program some of those things. The solutions like HubSpot are key or whatever, as long as it doesn't become mechanical, right? To follow up with them. And let them know that you're getting your they're getting some of your attention, as long as it's highly personalized. So you know, you guys say if somebody says thank you for your time, you guys were taught back, no thing. No, say thank you for your knowledge. Um, I have a similar one. If somebody says thank you for your time, I'll say no, no, thank me for my attention. Because maybe at that moment, I didn't disseminate any knowledge. Maybe I was the receptor of their knowledge. But I gave them my attention. And I've got a funny little anecdote for this too. I was I was presenting on this in New York City. And and anything could happen in New York City. I love teaching in New York. And so I said, your time doesn't matter. And I just, I dropped that out in Ohio. Drop that out in Silicon Valley and Silicon Valley, if anybody does that get offended. They're guilty, because they shouldn't get offended. And then, you know, and then over here in Georgia, they're just like, you know, whatever. This lady in New York, was ready to come out of her chair, when I could see that she was ready to come out of her chair, kind of like how dare you thing you know, I'm not valuable. And and so when she started, she raised her hand, she was actually halfway she had, she had one, but she added the cheer. And I said, I said, I said, Ma'am, I understand that you're having a strong reaction to this, let me tell you what I'm not saying. I am not saying you are not valuable. You are valuable. I'm saying that the phrase your time is valuable, is an inane phrase, it's like saying your square cube is really round, it makes no sense. Because you can't have time. You time is a force of nature. It's like saying, I'm going to go to the gym, I'm going to control my gravity, I'm going to, I'm going to manipulate my gravity, okay? So never your gravity, it's a force of nature that you happen to be leveraging in order to make your muscles get bigger. But Einstein even said that time and space are the same thing. So now you want to say that I'm going to manage time means I'm going to manage all of time and space so that I can own all of time and space. So when we get to the right question, only then can we get to the right answer? And what is extremely valuable, is your attention.
Ed Kless
Yeah, it's funny, I think I, I either did a blog post or I envisioned myself doing a blog post a number of years ago, on on on this, the notion of all of the different metaphors that we use with time, save time, make time, right, invest time, and they're all really crazy, then when you actually try to try to parse them out, because my, the phrase that I use that you said eloquently, as well as time is straight. It's not a resource, right? Because it's it just is it's a it's an Gilder put it, it's a measuring stick, and the measuring stick doesn't change, the foot doesn't change the yard doesn't change, it's it's the measuring stick. And it's the constraint under which we all live, right? So it's not anything that can be created. We can't create time we can't make time right up and and you're right i like that i like that notion of of attention as well. That's it, that's a that's a really good way to phrase it. So I'm gonna, I'm gonna steal that and incorporate that in into my
Joe Woodard
Pat and I would add to it that we can't manage time either. So so that begs the question, what can we manage, we can only manage a task. And in the management of tasks, the first line of business is prioritization. And as a consultant we prioritize those things that will increase our clients wealth.
Ed Kless
Yep, yep, manage the work not the people as the the folks from row says, but we're up against our next break. Want to remind you that you can contact Ron or me by sending an email to ask TSOE at various ages calm. The website is of course, the soul of enterprise where you can go out and get show notes as well as previous to upcoming shows. Our archive page, which is where you can find all previous 250 some odd shows including Episode 119, which is our first interview with accounting thought leader Joe Woodard, but right now a word from our sponsors.
Josh
All right, you're clear.
Ed Kless
So I sue. I could do I had the next segment to ask what the second thing was? Yes, sure.
Joe Woodard
I guess that's a foreign question. So I'll
Ron Baker
let Ed do it. I'll let
Ed Kless
this be Mrs. turning into a very easy interview
Joe Woodard
sides of the same coin. It really is. Is it important? Is it important, the other side
Ron Baker
not really go down a different road and so you can you can bring it back to the second thing. Okay, good. I'll mention it. I'll mention it.
Ed Kless
Okay. And then Joe, you got to read just just finished the case against reality. Oh, by Donald Hoffman. Did you read my review? Ron?
Ron Baker
Yes. It gave me a headache. So I don't know.
Ed Kless
Space Time is Doom Joe space time is is Does It Really?
Joe Woodard
Yeah. Okay.
It's good to know.
So where we can exist?
Ed Kless
consciousness?
Joe Woodard
Interesting.
Ed Kless
It's absolutely fascinating. This guy the
Joe Woodard
quantum realm is it isn't general. No. No
Ed Kless
DEP. Donald Hofmann the first time. Yeah. case against reality. Basically, the short short answer is he uses he uses the theory of evolution. To to prove that there is no, there is no space.
Josh
Come back. Yes.
Announcer
You are tuned into the soul of enterprise with Ron Baker and Ed class. To find out more about our show, visit us on the web at the soul of enterprise.com. You can also chat with us on Twitter using hashtag ask TSOE. Now back to the soul of enterprise.
Ron Baker
Well, Welcome back, everybody. We're here with accounting thought leader Joe Woodard. And I really enjoyed that discussion, Joe with Ed about the measurement aspect and the whole time is money. viewpoint. You know, Oscar Wilde famously said time isn't money, time is a waste of money. But always, always like that line. But on the measurements sticking with that. I heard you on a recent podcast and you were discussing Apple as an example. And specifically the Apple iPhone, you said take a look at what Apple measures with respect to the iPhone. It's certainly not how long it takes them to produce said. It's other things and what explain that. And then what lessons what lessons for accounting firms, bookkeeping firms that holds?
Joe Woodard
Yeah, well, so so when Apple is measuring the iPhone, they're measuring the quality of the product as it is perceived by the consumer. And not as not as it is perceived by the apple engineers. But as it is perceived by the consumer. The consumers thought one of the old Apple Macintosh is look like Betty Jetsons microwave oven. Right that so that was the perception, I think we all know which one we're talking about. And so that perception meant that it had a very short life. So when you're when you're measuring what matters, you're measuring a product. If you're under the delusion, that time is your product, then that is what you will hyper measure. So one of the one of the interview with accounting today, I pointed to one of the staples of all professional service measurements and metrics, it's billable versus non billable time. And from that you get a realization rate. Okay, well, that's, that's irrelevant. That's an irrelevant measurement when it comes to quality, because you're not even measuring the product. And then that starts to kind of like I talked about the first thing that you started to hyper dissect that, well, how can we get your ratio of billable non billable time? How can we get that better? Well, then are you know, then we start asking the really inane questions. Are you turning off the time when you go to the bathroom? Should you turn off the time when you go to the bathroom? What's the ethical implications of that? If it doesn't cross the five minute mark? If you do go the bathroom too much? Because maybe you ate too much Mexican for lunch? Did you work 15 more minutes during the day, in order to count the count for all the bathroom breaks in order to get the realize bill rate up? How do you factor in PTO? How do you factor in vacation? What do you do whenever there's a write down is that a realization of billable versus non billable, and the whole thing will make your head explode or make you throw up or maybe same time. While the client is out there think about now what we're really trying to do. And this gets us back to the transformative advisor. Joe's lawn mower shop is out there trying their best to make lawn mowers and survive. They've got some sort of a, sorry, they've got some sort of a problem that they're trying to solve. They're trying to get the lending that they need. They're trying to get the they're trying to get the supply chain for their parts worked out. They've got real problems that they needed an advisor to work with them on. And we've got our heads down, focusing on how much time last month we spent preparing that person's financial statements. Wouldn't the time be better spent measuring the financial statements, or maybe maybe making a cash flow prediction because if we could have done that, they wouldn't be in a cash crisis right now trying to scramble with the bank in order to make the next payroll. So if we can turn lift our heads up, get our heads out of the time sheets and focus on the client pain solve the client pain, price it right. And I know that the pricing right this key, then we're all taken care of in the equation.
Ron Baker
Yeah, I love that. I love that analogy. It's it's really spot on. It really makes people think about what the customer the customer is ignored with hourly billing and the timesheet measurement. And on that I mean, I know you've been at scaling new heights, your your company, your flagship conference every year. You've had me and you've had Kirk Bowman and you've had Mark workers come in, there's been a lot of emphasis on value pricing. Where do you see that movement? Is it diffusing?
Joe Woodard
I think the value pricing is become tired as a content concept only because it's been taught so much. But it's it's tired while being grossly under adopted. And that's a tragedy if it is under adopted because people don't know how to sell so the books I'm reading right now are books on how to sell books on how to negotiate. I'm reading a book called Getting to Yes, reading a book called never split the difference. I'm going back and visiting a lot of the covey principles where he where we heard when when so many times it becomes trite. But covey actually breaks it down and dissect what a win win looks like. And then one of the other books that I'm reading by Patrick Lyndsey on ER, I've read and I'm rereading is a the the book called getting naked, because in that book, that book should really be called the relationship worker. First, it's easier to Google without getting in trouble. And second, it'd be more appropriately titled, because in that book, he in a narrative way as Patrick Flynn cod's want to do, he talks he described out in a storyline what a relationship worker really looks like. And what amazes me every time is how little time he actually spends with the client. He'll but he's physically present. He'll walk in, he'll look at something like a piece of artwork or a marketing messaging, or he'll look at something that's happening in a business plan, he will call it the problem. He'll say, you've got to change this, he won't even wait for much of a response. And then a walk out the door, almost like a fractional CEO would do. This is not a matter of a question, this is a matter of a dictate change this or it's going to go bad and out the door. He goes. And he's built such trust, that they will listen to what he has to say they'll do it and 99 times out of 100, it's going to generate more wealth for them. But he's doing all of that in a relationship, not driven by how much time is there? Right, in the fear of what they're going to think and all of the other psychologies that come into play, and definitely with his head up.
Ron Baker
That book never split. The difference is that the former FBI negotiator
Joe Woodard
it works because sometimes when you're trying to value price, you feel like that,
Ron Baker
isn't that that's a great book, because there's so much counterintuitive advice in that book. And I just, I just love it. And I love some of the stories to the hostage situations. But on that, okay, so value pricing is, you know, tired, but under under adopted, as you say, what about time sheets? What about are people still clinging to their time, she's like a security blanket.
Joe Woodard
I unfortunately, I think the rank and file are now some of the folks that come to scaling new heights of the gun to back off of those. But what I'm finding is that they do hold on to them, they hold on to them for this set, like these five kinds of engagements, we're going to track time bill by the time these over here, we're not some of the ones I'm hearing that they focus on tax returns note, not so much bookkeeping, no, not so much. But if they get a brand new client, and they're trying to do client file cleanup, then that's Pandora's box. And anytime they feel like they're opening up Pandora's box, they run to the safety of a time sheet to protect themselves. And, you know, I can't blame them there, they need some form of protection. We don't know what's in Pandora's box, right. And it's it's impossible to spec that are very difficult to spec that. But that is actually my response, create a flat fee specifications, engagement, open the box, don't change anything, don't fix anything, just write down what's in the box and what it's going to take to fix it. Now you've got a project, now you can plan against it. Now you can price it,
Ron Baker
right, you can put it into as I've, I've really gotten more bold on this. But you know, we talk a lot about risk and profits come from risk, that's their only origin. So when I see an engagement that's got risk or uncertainty in it, I want to run towards it, because that's where you can make real profit, we can't make profit by reverting back to the hour, leave a nice, safe hourly rate. When there's uncertainty and risk, we have to run towards the risk.
Joe Woodard
Man, I know that's really the clients gonna run out of money or run out of value perception, they're going to try to shut it down, or they're going to try to talk you down. And so the whole thing ends up having the same little trap. It's just, you know, what point do you fall through the whole, I couldn't agree with you more, you know, embrace the danger, run into the risk. And with that can come tremendous reward. Maybe sometimes you'll spend a little more time than you planned. But But you know, what does that really mean? it and you'll learn a lot in the process you you've earned the trust of the client in the process. And then the only other thing I would say is when you can form a specification, be extremely specific about the specification, and the the slightest deviation, pull out a change order. Because Because it's not about how much time and this is where time can become another form of a trap, it's only going to take me about 10 minutes to do this different thing that they're asking for. Folks, I'm just going to throw it in. All right, that's the other side of the time trap little time, therefore irrelevant, no big relevant, hugely relevant psychologically, as well as sometimes in terms of value. So I, you know, pop the change order out is going to be $50 going to be $100, it's gonna be $300, whatever the value of that thing they're wanting you to do for the 10 minutes may be and then it will also set the guidelines for the relationship that you go off spec, you pay more money.
Ron Baker
Right. And with all whether you phase it or do that tight scoping and use change requests diligently, you're managing the client expectations, you're doing that constant communication. And that's what what's important, no matter what, because we fall into all sorts of traps through just lousy communications with with the customer.
Joe Woodard
I get I get asked all the time, how do I get started, and I've got an example of this is very fresh, I've got a client, their software developer, I'm doing some consulting with them on a product launch. And neither of us really knows what the relationships going to be like, they just know they need some guidance, and they want me to be there. They want me to be in the room part of the team. So on the call without any kind of specifications work that was to to a theory for that I said 1500 dollars a month. And then they said, Okay, great. What does that get me us? It gets you me. But meet your slack. You know, throw me on send an invite, I'll jump into some comment. I'll jump into a meeting, how many meetings see they're trying to they're trying to know, five meetings, 10 meetings, 15 meetings, whenever you need me to be in a meeting, throw me into a meeting? Shoot me something in a slack? I'll I'll answer it Yeah, asked me to take a look at something, I'll review it. But this is the key. But at some point in the future, you're going to feel like you're getting too much of me for 1500 dollars a month. And when that time comes? Why don't you change the price?
Unknown Speaker
Right? Our discretion
Joe Woodard
at their discretion. Now if they wait too long, I might hint, right. But that's the nature of a relationship relationship is to interdependent people with their own sets of very well established boundaries, defining the nature and the terms of the relationship. If I ever feel like they're either by distraction, or by intention, taking advantage of me, I'm going to come back and say, Yeah, well, I think we're at 3000 a month now 4000 months now, whatever it is, but at that point, I have a chance to look back at some of the successes, you know, as you can see, I accomplished this with you or headed off the past that you, you know, save saves you a big run into a brick wall over here. And justify the increase in price.
Ron Baker
Right, you're back to the quality of the outcome for
Joe Woodard
rather than, yeah, I can actually win some win some outcomes and and and establish my value so that we can then price something we get out of that chicken and egg problem.
Ron Baker
Right? I love Ed calls that selling your brain. And that's what you're doing there. You're not selling a pair of hands or a series of tasks or scope of work, you're selling access to your brain, whatever they need. And that scares the heck scares the heck out of a lot of professionals because they think it's so open ended because they're stuck in that time mentality. But it's just amazing how much value you can add in a short period of time sometimes?
Joe Woodard
Well, and I'll tell you one thing to that makes it and this is why it should be appropriately called relationship work. I actually like hanging around with these people. So you know, when they call I don't went I don't think oh my gosh, I got I've got to deal with them. I'm delighted. I can't wait to get into a meeting. They have an amazing culture. And so I'm having fun. They're paying for me to have fun. I don't see a downside.
Ron Baker
Yeah, that's that that those are the best relationships because nobody's a supplicant. There, you're you're both equals your colleagues at that point. I heard you once a job that you recommend your you see the day where we could get to where the compliance work is just done as part of the advisory services being, you know, engaged.
Joe Woodard
I mean, automated.
Ron Baker
Yeah, yeah, I realized that relies on automation. But do you kind of hold that view that the compliance work should just be kind of thrown in? As long as they're in the advisory work?
Joe Woodard
Yes. As matter of fact, I was asked on the podcast once if I could give any advice, any single piece of advice to the entire accounting industry, this was a global podcast, what would it be? And I said, stop selling accounting services. And boy did I get reamed on social about that. But because I did not say though, stop doing accounting services. But I said it stop selling it. Because to sell it means that you immediately attach yourself to a price anchor of price anchor that is constantly getting lower and lower and lower. As more and more of the scale bookkeeping models and monetize bookkeeping models pile on. So instead, what I say is sell results. So outcome salary, increases in wealth, all that stuff we call advisory work, but advisories another word that's gotten really, really tired, right. So that's why I call it transformative advisory, instead of trusted advisor, trusted, trusted can be passive, we all trust our CPA, we trust, they're not going to go you know, put ours our tax returns out on Twitter, or that's a passive trust. An active trust means that if you give me advice, I'm going to change something in my life is as a result of what you have said, that's active trust. And an active trusted advisor. If they're providing good advice, transforms, you transforms your business. And then we have to define what transformation is, I am a better human being is a stronger business. And then you can start drilling down and all the aspects of that. So if we're, if we're focused on all of that, if I say my job here is to make your business stronger, better, more profitable, more scalable, more valuable and ready for succession, which everybody should start thinking about from day one. And to come alongside you for the whole of the journey, a phrase I use a lot, which is summarized in the Greek word parrot cleat. That's my job, then everything else becomes a means to that greater end, having accurate, timely financial information. That's a means not an answer.
Ron Baker
Yeah, excellent.
Joe Woodard
Yeah. So whenever they say, Well, I can go over here and I can get it for X Prize. So you're not going to be my price. My price is free. I don't charge for bookkeeping, as long as you are my advisory client. But for advisory, we start at $4,000 a month.
Ron Baker
I love it. I'm sure Ed's going to ask you about that Greek word that you threw out. He's also going to ask you about the second thing you changed your mind on but unfortunately, we're actually overtime for our break. And folks like to remind you, if you want to contact Ed or myself, you can send us an email to ask DSOE at bare sage.com check out the Patreon site at patreon slash TSOE. And now we want to hear from our sponsor sage.
Ed Kless
All right, you're clear.
Ron Baker
ran over on that, Ed? Sorry.
Ed Kless
No, no worries.
Ron Baker
can be a short segment. Joe? Six minutes or so? Yeah.
Ed Kless
Yeah. Because we have to be out by 57. So if your timing on this, just
Ron Baker
just so you know.
Ed Kless
And so yeah. And next week, run we're learning up. We're gonna be talking about all things very Sage down under that.
Ron Baker
Okay. All things legal. And
Ed Kless
then, what, 57 we'll wrap it up. And that's from Ron and I will just do a little banter to wrap through. So gotcha.
Unknown Speaker
All good, though.
Ron Baker
Yeah, he dropped that Greek work on me this Greek word on me this morning. So maybe maybe as you can get the Latin word for it? Well, no, it's all about the Yiddish word.
Ed Kless
Yeah. Apparently is is one of the names for the Holy Spirit to
Joe Woodard
yes, you do know that? Yes, I was actually appropriated by the Christians and, and, but it predated them. It actually goes back to Stephanie's. But it just means one who comes alongside of for the whole of a journey, which is applicable to the Holy Spirit? Yes, I can see.
Ed Kless
The Christians are really good at appropriating lots of things. That's what we got Christmas and Easter and Easter eggs. And we like that. What was it? Well, you know, when you think about it, you know, especially when they were talking to people who were doing human sacrifice, and you're like, No, you don't have to do that anymore. Oh, all right. Back,
Announcer
you are tuned into the soul of enterprise with Ron Baker and Ed class. To find out more about our show, visit us on the web at the soul of enterprise.com. You can also chat with us on Twitter using hashtag ask TSOE. Now back to the soul of enterprise.
Ed Kless
His vision is to transform small businesses through small business advisors. And we have with us on our last segment of the show today, Joe Woodard and Joe, I had the opportunity to ask you about the first thing that you changed your mind on and then we went a little bit long on that. So what's the second thing that you've changed your mind on
Joe Woodard
was the other side of the same coin, I was living in hypocrisy, I was saying that you know what, but it doesn't matter. I don't sell hours to my client, I sell results to sell outcomes. But then I was paying my employees by the hour. And I thought that I had myself inoculated from that because everybody was salaried. I had no hourly employees. So I was telling myself, Well, I'm not really paying by the hour, I'm salary salary to everybody, until I got the 500th said, Okay, if I leave an hour early today, I'm going to go to the shopping center cannot take a long lunch. And I realized that the mindset of my employees is that they're trading hours for dollars. I took that entire mindset away by saying, I don't care. If you want to go on a 10 hour shopping spree five days a week, I don't care. All right, what I care about are two things, get the job done, and be here for your teammates. As long as you guys have that worked out, you can bring to me any issues and escalate them to me as necessary. I'm good to go. And part of that, of course, is at least somebody has to be here to pick up the phone or respond to the chat bot. But cover the company, make sure the customers are happy. And then do whatever you want to with your time. Because time is not relevant to the outcome. It is simply the air we breathe.
Ed Kless
Yeah, another another thing that's way underrepresented in the in the world today. And that is the real movement, the results only work environment. I mentioned that earlier, Jody Thompson has been on the show and her great phrase, manage the work, not the people what's got to get done, the work has got to get done. That's what's got to get done. So we manage the work. And I don't care if you follow what's left of the Grateful Dead around as long as the work gets done. We're good with it.
Joe Woodard
But you know, I've seen some thumbs up some incredible things happen and that we just put this in about a month and a half ago. And already I'm seeing that a mom in our company was at her kids school play at three o'clock in the afternoon is that elementary play thing. And then I saw that her kid was in our conference room, just doing his homework, which I thought was kind of cold to some point, she went and picked him up. She didn't have she didn't have to ask me, can I go pick him up, she knew the conference room was available, she stuck her kid in there. It wasn't available space, she didn't have to ask me. But I saw that same mom on Saturday, working to make sure that all of her tasks got done. So as long as you trust your people to get the tasks done, and as long as you measure the outcomes, so I've started sounding like a broken record, if people come to me anymore, and they say, can I have so and so off? I don't know where you had on your tasks. And sometimes they'll cut a heads down and they'll realize that they can't give themselves that day off. Or the best their choice. But I never say yes. I never say no, I always return that with a question. Are you on track with your tasks? Are you going to hit your deadlines? Where yet for this milestone? Are you going to slow your team members down? Do we have somebody answering the phones? Is somebody managing the cases? How backlogged is our caseload? If depending on the answers to that, and I don't even want you to give me those answers, I want you to go look, and I want you to make a grown up decision as to whether or not you can take it to our lunch go. Yep,
Ed Kless
yep. Great stuff. So Joe, rotten Brown was asking about value pricing. And we've only got about 90 seconds left. But I wanted to get your thoughts on, how do you see what we're calling value pricing two point O, that and that is, of course, subscription based pricing. And the mantra that we've been offering for this is, instead of what we talked about for years, which was price, the customer not the work, we're saying price, the portfolio, not even the customer.
Joe Woodard
Yeah, when that's kind of what I did with this client for us is 1500 dollars a month, right. And so so before I had even really absorbed this whole idea, subscription based pricing, I just instinctively knew I had a strong relationship with the client, they trusted me, they just wanted me on the team, we set a price per month, there we go. I did the same thing with another client up to $3,000 a month because the value prop was more established coming in the front door. Right? So these things may go up, they may go down. But I think it's I think it is the future of value pricing. Because of the fact that we can get started, we can set a term, let's reevaluate in four months. All right, anybody can do anything for four months. And then when we reevaluate, we have a track record. How much value do we generate? What is the trajectory for future value we're going to add? Where do we want to set the price for the next term? It's a great, that's a great way to do it.
Ed Kless
Yeah, no, it really, really is. And we've, we've spent a lot of time there spent that metaphor again, spent a lot of time
Ron Baker
wasted a lot
Ed Kless
of attention. We've given a lot of attention. Thank you to this notion. And yeah, we're on the same page here with regard to this. The future of this is more subscription across the board. All right, Ron. Well, Joe, want to thank you for being a great guest again, and we'll love to have you back. And you know, maybe we'll put a cadence of three years it'd be a cyclical thing or like a physical count inventory or something. I don't know. Well, let me make that all work. Ron, what do we got coming up next week?
Ron Baker
Well, next weekend, we're going to lawyer up with three Australian lawyers, john Chisholm, Matthew Burgess, and David wells all happened to be various age fellows, by the way, and we're going to be discussing what's going on in the legal marketplace down under, and also our Paris age down under symposium. We'll talk a little bit about that, and what what events are planned and the agenda. So I'm really looking forward to
Ed Kless
Wow, I can't wait. That's going to be a great conversation. I'll see you in 167 hours.
