Business Complexity Made Simple(r)

IMGCAP(1)]Tools and technology have all been created to make life "better."

"Better" can be defined as: easier, faster, more scalable, more profitable, safer, more reliable, and _fill in the blank_...you get the picture. That said, with all the tools and technology available, why has life seemingly gotten more complex?

There are four simple functions of nature and humanity that create the chasm between clarity/simplicity and busyness/distraction. Recognizing these factors will help your firm address growing business complexities more effectively and will help you develop a plan to target the issues that matter most to your firm. Then, once a plan is established, it is critical that your firm regularly revisit your strategy to accommodate today’s ever changing business landscape.

As it relates to nature:

Chaos Theory

The Chaos Theory is a complex discussion that touches on many aspects, including mathematics, physics, and philosophy. In essence, CT states that small, seemingly insignificant changes that happen to initial conditions produce drastic swings in outcomes that could not have been predicted. In simple terms, something goes awry and what happens as a result is not what you would have expected. This can happen through small rounding errors or as stated in the butterfly effect. This also explains how something seemingly simple can quickly develop into something increasingly complex, regardless of original intentions.

For instance: Technology does not take into account future changes, future technologies, or future anything. It’s a tool created using the past to predict the future. Thus, whatever plan you put in place today, no matter how effective it is right now, will be less potent once it solves the issues it was created to address. Therefore, the question remains: will you rework your plan as new issues arise? Often times the answer is no, we use the old plan for new issues assuming the plan will continue to work as it has in the past.

So now: Revisit your business plan. You must remain nimble in your business as much as possible given the rapid changes that now occur in the corporate landscape. Stick to your core services/products and outsource, or don’t do, the rest. There will always be new technologies that force you to question past investments even though they have not fully depreciated yet.

Does that mean you shouldn’t consider new ones? Of course not, if there are savings or legitimacy to the new, it is wise to modify your plan to take advantage of the benefits of the new.

Revisiting the plan regularly is also crucial so you can stay up to date with addressing the latest issues as effectively as possible. If your plans are older than 18 months, it’s time to revisit them before CT takes you somewhere you don’t want to be. There is no such thing as the 3-5 year plan anymore.

Least Resistance Issues

That’s simply not the case with technology or any other component of your business. When lions find a herd of gazelles, which one do they attack? The slowest and/or weakest is the typical choice. The same applies to all of us and how we tackle daily issues. We address the issues that are easiest to knock out first; what I like to call the least resistance issues. You may have noticed, though, that as you continue to pick off the LRI, the subsequent issues become harder and harder to solve. This isn’t brain surgery, however we often lose sight and think if we attack the next issue like we did the last it should get ‘solved’ and/or work itself out.

For instance: Business development (BD) is a game of supplying leads through grass roots and/or relationship movements. As you begin your BD efforts, you pick the easiest relationships and see lots of fruit. Leads come in and everyone is happy. As you continue to look for new lead sources, however, leads are harder and harder to come by. This is especially true if your service/product is relevant to a set service mix and/or geographic region. Explained further, if you have 100 possible leads in your area and you get 10 of them this year, how many possible leads will you have next year? Only 90. So reaching the remaining 90 leads using the same budget as last year in essence creates a high cost per lead. Eventually the lead will become so expensive you can no longer market.

So now: Tune your business model. Stay the course or change your service/product in order to find new business opportunities. If you have a market cap of 100 leads and continue to spend money trying to close business with those leads, your cost per lead and cost per acquisition will eventually climb to a point where you can no longer afford to market. If you continue to market where you in fact should be creating a new service to expand your market, so marketing is once again effective, then you will be spinning your wheels with little to no fruit.
As it relates to humanity:

Amputation and Extensions
With all of the new technologies we are able to do so many things that make our lives easier. However, there is an aspect of this technology that rarely gets the attention it deserves. A simple analogy is the car. The car is basically an extension of our feet, allowing us to travel faster and further with more ease and comfort than previous generations could possibly fathom. However, what amputations, or negative side effects, have come from the automobile? Pollution, isolation (even as we sit among hundreds of people in rush hour), obesity (because we never walk anywhere), less community involvement, and the list goes on. In short, cultures often prize extensions while shoving amputations to the background. This has consequences that you most likely feel but may have a hard time wrapping words around.

For instance: Your firm has just launched a new paperless (or less paper) work-flow including software, processes, etc. This process frees up time in all areas of the business and realization numbers increase. Everyone is happy. However, after 2 or 3 years, you have "looser" relationships with your client base. Why? You don’t see them as much; it’s all done over the web. As you know, a key to a professional service firm is trust and this is earned through touches and recurring value creation often tied to face to face meetings. Paper created excuses to see clients and find ways to help them, what’s your new excuse to see them?

So now: Revisit your workflow. You need to rethink your new workflow and include "touch time" as a part of the process. Use the time saved to provide your client’s value and oftentimes this comes in the form of face-to-face meetings or phone calls, not e-mails.

Distraction Tyranny

I had a running joke in college and in my early 20’s that when a girl broke up with me (and/or the other way around) I now had time to learn a foreign language. Learning another language has always been on the top of my ‘nice to do’ list, but always seems to get shuffled down the priority deck. The formula I worked in my head went as follows:

1 Date = $40 avg. each date + 4 hours each

1 Casual Time (run date, coffee break, lunch, etc.) = $10 avg. each + 2 hours each

1 Week = 1.5 Dates + 1.5 Casual Times

So, over the course of a month, this amounts to $300 and 36 hours; the same amount of time and money I calculated it would take to learn a foreign language in a ‘fast ramp’ fashion.
So what’s my point? If we have a huge block of time suddenly free up, we often fill it without considering what would be beneficial long term. We, especially Americans, have issues with focus at times and tend to immediately fill the time when something opens up. I would gladly hand over five or so past relationships to now know Español.

For instance: We roll off the board of our local Chamber or our kid no longer has football practice, so we go out and sign up for something else for us or them to do. We run our businesses lean and keep the overhead low...well how about with our time? We add overhead like it’s going out of style.

So now: Revisit your time overhead. Instead of keeping yourself busy sit back and think (via reading, music, and hobbies), sleep, and exercise. It’s amazing what a well-fed and rested brain can do. I see so many CPAs who have become drones, and, believe me, your clients notice too. Ideas become lackluster and your communication falters when you’re tired. I see it in myself too and I can’t stand it. Get lean!

Roy Keely serves as director of marketing at Xcentric, which specializes in cloud computing and IT consulting for CPA firms. He graduated from the University of Houston with a degree in marketing and has extensive experience in marketing, branding and sales. He can be reached at 678-297-0066 or info@xcentric.com. For more about Xcentric, go to www.xcentric.com or follow them at www.xcentric.com/blog and www.twitter.com/xcentric.

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