Hot wash that tax season away

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Tax season is over. I’m sure the last thing you want to do is revisit the last couple months, but now is exactly when you want to have a debrief. The experience is still fresh in your mind. By documenting and addressing the friction points and bottlenecks ASAP, you will make the process less stressful and less painful the next time.

I know what you’re thinking: “If I get the whole team in a conference room this time of year it will be a couple hours of bitching and moaning. Fingers will get pointed. A few notes will be taken and then nothing happens.”

Not if you do a hot wash. Hot wash is a military term describing how soldiers douse their weapons in extremely hot water right after combat. The idea is to remove grit and residue that can jam the weapon before you need it again. It will also make the full cleaning process much easier when it comes time to disassemble the weapon completely from top to bottom.

After 9/11, the U.S. Department of Homeland Security was created after a hot wash found we had serious breakdowns in our intelligence gathering and sharing processes. FEMA adopted hot washing in the aftermath of flawed disaster recovery efforts post-Katrina and Sandy. The SEC and Federal Reserve spent plenty of time hot washing after the subprime mortgage crisis almost brought the global economy to its knees.

A thorough hot wash should include:

• Analyzing what worked well;

• Identifying what needs improvement.

• Assigning a person or team top to be accountable for the agreed upon improvements;

• Making assignments and timelines for the corrective and proactive improvements.

So what’s all that have to do with tax season? Plenty, it turns out.

During tax season you’re in crisis mode more often than not. It’s not the time to be trying new software, changing your client portal or altering your document delivery process. There’s too much at stake. Ideally, you want to do your internal hot wash right after tax season—when all the issues are fresh in everyone’s mind.

But that’s not what happens at most firms. April 17 rolls around and everyone scatters for a week or two of well-deserved R&R. By the time they get back, they’re in catchup mode. The daily drift of assignments and responsibilities swallows them up and guess what? The same breakdowns and crises happen again the next tax season and the next. It’s like the movie Groundhog Day.

High-performing firms take a different approach because they know the most valuable part of their tax season is the three days immediately after tax season ends. That’s when they take the time to identify what went well and what the biggest issues were. That’s when they think about introducing a learning plan and improving systems and technology. It’s also when they identify who the problem clients are — the ones who suck up all your time, resources and patience, but who don’t pay you for the value you deliver. A hot wash is a great way for addressing these issues in a structured way, so it doesn’t become an unproductive free-for-all with little in the way of positive outcomes.

Getting everyone onboard with a hot wash

You’re not in the military. Screaming into a megaphone, barking out orders and intimidating subordinates into attending a hot wash session won’t fly at most CPA firms. Instead, assure your team that the hot wash will be a low-key setting in which everyone can speak up without repercussions and that everyone’s opinion matters. That’s not being soft; that’s being practical.

Also let your team know that they won’t be sequestered in an interrogation room for hours on end. It will be three half-days of relaxed discussion. No other work will be done on those days. Start no earlier than 10 a.m. so everyone can sleep in and arrive fully energized. Bring in snacks, order a nice lunch each day and let everyone head home by 2 p.m.

As I wrote in Autopsies Without Blame, the idea is not to point fingers at specific people. The idea is to point the finger at systems and processes that broke down during tax season and during other crunch times at your firm. Just start writing down all the things that grind your firm’s gears during tax season. No one should be taking things personally.

Let’s say you had some issues with your client portal during tax season. Immediately after tax season is a great time to identify the technological and user experience issues that irritated your clients and your staff. You don’t have nearly as many clients breathing down your neck trying to use it and you can make some tweaks during a lower-risk time of year.

Do the same exercise with your tax software, your billing system, your workflows, your client organizers and other points of friction that grind things to a halt during crunch time. That’s the right way to hot wash.

As Teddy Roosevelt famously said, “Complaining without proposing a solution is just whining.”

Appoint a single person to handle the whiteboard, direct traffic and keep things moving along. If you’re like most firms, the majority of issues you write on the whiteboard will fall into one of four categories: People, Processes, Technology and “Other.”

The IDS (Identify, Discuss and Solve) Process is a big help for keeping a hot wash on track:

Day 1: IDENTIFY. Just throw out ideas, questions and concerns on a whiteboard. Get into the grime and dirt and make sure no area of your firm is left untouched.

Day 2: DISCUSS. Start clarifying all the issues you identified on Day 1. What are the most important things you need to address within the capacity limits of your firm? What are the 20 percent of things you can fix that will increase the 80 percent of your results? To be successful, Warren Buffet says you should list the 25 things you want to accomplish in life, then circle five of those things and erase everything else. The same logic applies to your firm. List 25 things you most want to get done. Circle the five most important things on the list and come in ready to discuss them in-depth on Day 3.

Day 3: SOLVE. From the list of five items you selected on Day 2 above, develop a plan of attack. Identify what success looks like and who is accountable for getting these things done. Where do we need to be at specific checkpoints throughout the year in order to stay on track?

I know you’re tired. But can’t you find the energy to devote three half-days a year — about 12 hours — to making the other 362 days of the year exponentially better, cleaner and more rewarding?

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