Leadership in Hyperdrive – Powered by Improv™

Leadership and improv are not opposing forces.  Improv is a strategic component of good leadership.  WHAT?!  That is what I said, I stand by it, and I can prove it by what has been written in the Wall Street Journal (Oh, My God, Where Is This Going?’ When Computer-Science Majors Take Improv), Forbes (Improv Training: The Power of Funny Business), and Harvard Business Review (Negotiation Research: Negotiation Skills from the World of Improv for Conflict Management: A Negotiation Skills Q&A), just to name a few.  I have curated 38 business articles, 22 books, and 23 videos on the intersection of leadership and improv.  
 
Let’s start this discussion around the key principle of improv, which is these two powerful words, Yes! And. Yes! And has many applications. First, Yes! And is about agreement but not always agreeing. It is about pushing forward a conversation and exploring the possibilities.  Yes! And is the opposite of “No because” or “Yes, But” because those are negative responses that invoke a negative emotion and are used far too often in today’s corporate environment. They are way too punitive where Yes And is open to possibilities. 
 
For Yes And to be effective, you must suspend your judgment and park your ego.  That’s right and let me say that again, suspend your judgment and park your ego – PERIOD. Push the conversation forward through a series of questions and positive comments in order to gain a better understanding of the issue the other person is experiencing.  This is called empathy. It’s about understanding the issue from their point of view, not your point of view. 

The process of listening and being empathetic is a powerful way of showing the other person that you appreciate what they are saying.  I read somewhere that 73% of people leave their job due to a lack of appreciation. How do you feel when you know someone is listening to you and trying to gain a better understanding versus shutting you down by saying NO?  

I am not saying NO should never be used because there are times where NO or “not now”, is appropriate. For example, someone is trying to push you into an unethical situation; the response should be NO. When you are leaving a meeting and going into another meeting, and an associate stops you to ask you a question, your answer should be, this isn’t the best time. Let me find a break in my day when we can discuss it without any major distractions. 

I believe that most conversations we have in the corporate environment should explore using Yes And principle as their dialog.

When I am working with a group of CPAs, finance professionals, or sales teams the first exercise I use to demonstrate the use of Yes And is called – No Because, Yes But, Yes! And. 

Round 1

Improviser A: Pitch an idea to Person B. For example, “After this class, let’s go out to dinner.”

Improviser B: Respond to the pitch with – No, because and gives a reason.  For example, No, because I want to avoid crowds so I can avoid COVID-19.

Improviser A: Responds back with No because, and give their reason. 

Improviser B: Responds back with No because, and give their reason. 

This round is no longer than 60 seconds

Round 2

Improviser A: Pitch the same idea in round 1 to Improvisor B. 

Improviser B: Respond to the pitch with – Yes, but and give a reason. 

Improviser A: Responds back with Yes, but, and give their reason. 

Improviser B: Responds back with Yes, but, and give their reason. 

This round is no longer than 60 seconds

Round 3

Improviser A: Pitch the same idea in round 1 to Improvisor B. 

Improviser B: Respond to the pitch with – Yes, and give a reason.  

Improviser A: Responds back with Yes, And, and give their reason. 

Improviser B: Responds back with Yes, And, and give their reason. 

This round is no longer than 60 seconds

When the exercise is over, I debrief them by first asking them how they felt during the No, because round.  They respond with words or phrases like: negative, no progress, confrontational, defeating and, argumentative. Then I ask them how they felt during Yes But. They respond with words or phrases like: it felt a little better, feels like lip service because they initially agree, BUT then they add their ideas without fully understanding where I am coming from.  Then I ask them how they felt during Yes! And. I get responses of – positive, found a solution, inspiring, motivating, and it felt so much better.

Wouldn’t you rather have a leader listen to you and try to help solve a problem using Yes! And versus shutting you down or making you feel bad? One of my favorite leadership quotes comes from Simon Sinek, and it is – “Leadership has nothing to do with a title. Leadership is the positive effect you have on another person.”

YES! And is a conduit to having a positive effect on another person.

Brainstorming solutions is another application of Yes! And. Let me start by saying you can’t create something and be critical in the same space. These are two different exercises.  When I hear the word innovation – I separate it into two separate pieces – creativity and effectively applied creativity.  Creativity or the initial search for the solution (brainstorming) requires divergent thinking. Divergent thinking is the process of generating as many creative ideas as possible (ideation).  Divergent thinking is about quantity, not quality.  The effectively applied creativity quality assessment comes through convergent thinking; we search for the right solution from the ideas generated.

Yes! And in a brainstorming session is about agreeing with an idea and adding on to it. In improv, we say, “bad ideas are bridges to good ideas, no ideas lead to nothing.” Take a moment and think about that phrase.  It makes perfect sense… Yes! And only if you have created a culture that accepts terrible ideas.  Once you have that culture in place, then you can take it up another level up and ask for crazy ideas.  The crazier the idea allows us a lot more bandwidth to find the solution.  We will not institute the insane idea but will walk it back to the middle to find a workable solution.  

We also say in improv “bring a brick, not the cathedral,” which means bring an open mind with lots of ideas and not the solution. My improv coach, Jay Sukow, reminds me that “Your idea is not the end idea; it is the setup.” You have to dial back your ego and accept that someone else’s idea is better than yours.  I have been quoted as saying, “the collective knowledge outside of your office far exceeds the collective knowledge inside your office. We all have participated in a brainstorming session where the boss has already decided what the solution is but solicits everyone’s ideas only to shoot them down. I call this an “ask-hole.” 

YES! And is a conduit in dealing with the unknown, like COVID – 19.  

There is something new every day in this global pandemic, or it just feels like it. Improvisors focus on the things they have control over and not the things we don’t have control over.  Another way to think about is “to improvise the scene you are in, not the one you want to be in,” and focus on today as much as possible.  

In March, when the country was shutting down, we stepped into a state of unknown and uncertainty.  At first, my mind went to a dark place in the future, and my business was completely shutting down.  But then, my improvisor skills kicked in and discarded those dark thoughts and just focused on the issues at hand, one day. Each day, I would shed the reality of yesterday and accept the fact of that day. The deeper we went into quarantine, the more I realized that the pre-COVID-19 world would no longer exist, and I needed to accept that fact and adapt.  

On a personal note, please stop using the term pivot.  The short definition of a pivot is “to turn on.” Whereas, the short definition of adapt is “to become adjusted to new conditions.” We are adjusting to our new conditions every single day.  This pandemic will be with us until a vaccine can be developed and widely and successfully administered. 

I have been adapting my business model to the new normal because that is the only thing I control. The facts – 85 percent of my speaking business either canceled or was postponed to later this year or 2021.  65% of my speaking revenue occurs during the months of August through December.  I have only nine scheduled engagements during this time frame for 2020, which is down 70%. 

I have been using this time to re-create my business so that it will not be as dependent on live speaking engagements to generate growth and revenue.  I’ve been working on building a consulting practice, sketching out my third book, moving my face-to-face presentations to a virtual, and creating a virtual improv workshop that I will launch in September 2020. 

Virtual presentations are not new to me because I have been doing them for more than five years, either pre-recorded or live.  I am familiar with Zoom, Cisco WebEx, and gotomeetings.com. I am a certified virtual presenter through eSpeakers, a business partner of the National Speakers Association.

The mindset of an improvisor is always adjusting to the new landscape and letting go of past realities. Think about this – how many of you all felt that the internet was just a fad, or online shopping would never replace “brick and mortar” shopping. Just ask Sears, Toys R Us, or Neiman Marcus, or Macy’s if they could go back in time, would they have taken online shopping more seriously?  I think we all know that answer.  

How about working remotely? I used to hear that people who worked remotely could not be as productive as those who work in an office setting. Those employees were sitting at home eating bon-bons and watching Ellen. However, during the pandemic, when offices were closed, we learned that we could be more productive working remotely to the point that companies are trying to reduce their corporate real estate footprint and shed excess overhead.

Leadership in Hyperdrive – Powered by Improv and the power of Yes! And, is a way of adapting to the changing landscape, becoming more creative and collaborative, and showing you do appreciate the people that you work with by taking time to listen and show empathy to them. Leadership in Hyperdrive – Powered by Improv is the type of leadership that will produce the most significant results.

If you have any questions or comments about anything in this episode, please feel free in emailing me at peter@petermargaritis.com.  

At Last, The Secret to Active and Authentic Listening

Have you ever had a conversation with someone – and you know the entire time that they are not listening to you? You can feel it in their energy, you can hear it in their tone, and you can see it in their body language.  They’re leaning back, with the “deer in the headlights” look; and if you look down at their feet, they are pointed to either the left or right because they want out of the conversation. Or, perhaps they are not listening to you because they have an agenda to push and they are just waiting for their turn to talk? 

If it’s about their agenda, then their body language is the exact opposite from before – leaning forward, rolling their eyes, and trying to make themselves taller with their feet pointed at you. They have something important to say, and they are either waiting for you to stop talking or better yet, they rudely interrupt you. Any of this sound familiar?  We’ve all been on the giving and/or receiving end of poor listening – how does it make you feel – and how are you making others feel? 

I used to be a terrible listener.  My over-inflated ego was driving the scene and I wanted my ideas to be accepted by all. Arrogant I was (think ‘Yoda voice’). 

Then, I was introduced to, and stepped into, the world of improv. One of the very first lessons I learned, was that to be successful in the art of improv, you need to “listen to understand,” aka, active listening. Listening to understand means you park your ideas, your biases, and eliminate all distractions. You suspend your judgment (set your ego aside), so you can focus on listening to what the other person is trying to communicate while managing your emotions. It is authentic.

Easy enough, right? WRONG!

Listening to understand is a skill that needs ongoing practice and strengthening. Over the last 20 years, I have become a better listener, with plenty of setbacks. In my book, Improv Is No Joke: Using Improvisation to Create Positive Results in Leadership and Life, I share this story.

Let’s say a CPA has a client across the table who is pouring out her angst about what’s keeping her up at night. The client is making it clear what she needs and wants, but the CPA is thinking of the services that they came in to sell and is waiting for their opening.

“Well,” the CPA tells the long-faced client, “we have this new product here that we’ve developed…”

The client wonders whether the CPA was listening to her – and he wasn’t. He was waiting to deliver a sales pitch. Far better if he could have put those products and services to the side and truly heard his client’s wants and needs and asked questions to learn more about them. A real conversation results in a meeting of minds. That’s the way to a genuine sale—one that’s a real fit.

We all can strengthen our listening skills if we work on them every single day. And when we do this consistently over time, you might just hear a client, customer, or co-worker say, “

“I am not sure why I told you that?” Or, “do you mind if I rant about a situation that happened to me without judging, only listening”? (Google – “It’s Not About the Nail”.  This is a perfect video to understand my last sentence.)

The other critical part of listening is empathy.  Empathy is being fully present and listening deeply to understand what they are saying from their point of view. In the Forbes.com article, Empathy Is an Essential Leadership Skill — And There’s Nothing Soft About It by Prudy Gourguechon, she states, “Empathy is the ability to understand another person’s experience, perspective, and feelings. Also called “vicarious introspection,” it’s commonly described as the ability to put yourself in another person’s shoes. But make sure you are assessing how they would feel in their shoes, not how you would feel in their shoes.”

Learning how another person feels in their shoes is critical and challenging to becoming a better listener.  We need to ask many questions – many good questions – to understand the other person’s situation and feelings. We all come from different backgrounds, ethnicity, and race. As a friend of mine, Dino Tripodis, once said, “we are the sum of our experiences.” Take the time to understand the other person’s journey, listen and learn, and think about how you may need to change your mindset based on the information you are receiving. 

If you would like to discuss ways that you can improve yours and your co-workers listening skills, please contact me at peter@petermargaritis.com and in the subject line put – At Last, The Secret to Active and Authentic Listening 

THANK YOU to all the heroes!

The coronavirus will be part of our lives until a vaccine is developed and administered. As of May 14, 2020, there are 4,387,438 confirmed cases with 298,392 (7%) deaths, globally. In the U.S., there are 1,395,265 confirmed cases with 84,313 (6%) deaths. These facts are from the COVID-19 Dashboard by the Center for Systems Science and Engineering at Johns Hopkins University.

When you take a step back from these numbers, they are entirely staggering since the first known case was discovered on November 17, 2019, according to the South Morning China Post. The virus came ashore in the U.S. in February 2020, just three months ago. 

There are hundreds, if not thousands of heroes in this battle, and we owe each and every one of them a big THANK YOU for putting their lives on the front lines to protect every one of us. Here’s to the doctors, nurses, healthcare professionals and scientists working on the vaccine and therapy’s; truck drivers, grocery store personnel, those who work in distribution centers, those who are making masks and giving them away, food delivery people, funeral directors, police, firefighters, governors, state officials, directors of state health departments; those essential profit and non-profit businesses; those who have recovered from the virus and have donated their plasma;  all of these are just some off the top of my head who deserve our gratitude.  And there are many, many more. 

The coronavirus has touched us all in some manner. You may know someone who had the virus and recovered, or you may know someone who has died from the virus, or you know one of the heroes of the virus. I know:

  • A personal friend contracted the virus early in March when the key questions were – have you traveled to China or one of the other infected countries? OR, have you come in contact with anyone who has tested positive? He was not tested, but his doctor told him to self-quarantine. It took three long weeks to recover and has no idea how or where he contacted the virus. During the three weeks of his battle, I would text him about every other day to see how he was feeling and check on his progress. Now that he has recovered, he is going to donate his plasma to help others.  
  • I have a friend who is a nurse in Lexington, KY, and she volunteered to go to New York City during the peak of the outbreak and help out in any way possible. I sent my friend a thank you note for her service.
  • I have a friend and his fiancée who are doctors and are working in the COVID-19 wings within their hospitals in Boston. We have sent them thank you cards for their service and will send them Cheryl Cookies once Cheryl’s and begin delivery.  
  • When I visit a grocery store, I try to thank all of those people who working to keep the shelves stocked and the store sanitized for the betterment of their customers.  

Take a moment and think of those heroes that you know.  Have you thanked them for their courage and service during this crisis? If not, then take a moment and thank them. I am sure they will be very appreciative. Stay healthy, be safe, and practice social distancing.

Step Away from the Script

The unlikely blending of Accounting and Improvisation is something I have in common with my two guests, Kristen Rampe and Jason Lieu, from Slide Deck Improv. Both Kristen and Jason started their careers in the Accounting field but later discovered Improv as a creative outlet. This prompted Kristen to create Slide Deck Improv, which features improv-based workshops as a way to put the fun back into the way professionals communicate in their workplace.  

Slide Deck Improv marries both worlds by working on presentation and communication skills with an improv angle. Besides being in a classroom learning environment, the audience also plays improv games, which is a great way to teach people to think on their feet. The experience not only taps into the creative process, but it also gives you more faith in your abilities and boosts confidence. Participants learn to enhance their speaking and storytelling skills so that they can connect with others in more impactful ways. It teaches people how to observe and try new skills while having much fun in the process. 

Kristen designed the program, so there is “a little bit of learning, a little bit of practice, and just a whole lot of fun.” Also, the course helps participants build confidence by assisting them to get “comfortable in the uncomfortable.”  

Professional development workshops are notoriously dull, but this one is not. According to Slide Deck Improv, they offer “a fresh and fun classroom experience to help professionals tap into their creativity and gain confidence presenting to groups.”  

Besides teaching improv skills, volunteers in the workshop present before the group. They present five slides (one picture per slide) that they have never seen before and a topic that will be selected by the audience. Just imagine a seasoned tax professional speaking on the subject of Botany. At the same time, a picture of cows pops up on the screen. While laughter ripples through the room, the group learns how to make public speaking a little less scary.  

All professional groups from sales to engineers will benefit from learning how to engage people with the newfound confidence that Slide Deck Improv provides. Whether it is interacting with your sales team, customers, or management, these skills can be utilized in your profession, but also transfer over into your daily life.  

Many professionals are highly analytical and spend a lot of time in their heads. Jason described his experience with Improv as, “In any given moment, I’m in my head trying to digest information. And I like to go back and analyze everything before I come up with an answer. Improv gave me this tool that allowed me to live in the moment, listen to people, and to engage in real-time, and I love the feeling and energy of it.”  

Jason expands on the benefits of the program. “I love Improv because it’s such a general skill. It’s not just a business communication skill. It’s a life skill. You can bring this into all your facets of everyday life. And it’s all about connecting with your audience no matter who the audience is. It could be your customers, clients, sales team, internal, external, whatever. It comes down to people talking to people. And if you can connect and engage people, you’re going to have this newfound confidence in your work.”

Everyone can benefit from this kind of workshop, whether you are a CEO or a young professional. Improving your communication skills while in a less traditional forum sparks more productive business relationships. 

You can join in on the fun, while Kristen and Jason show off their improv skills during season 2, episode 13 of Change Your Mindset podcast by clicking here. You’ll get a taste of how the programs work while gaining valuable insight into the process. Thank you, Kristen and Jason, for taking the time to share your innovative program.

Visit SlideDeckImprov.com to find out more about how you can ‘Step Away from the Script.’

FASB is the villain

After I heard this from an audience member for the third time, I realized I was perhaps on to something. This third time came when I was presenting a keynote at the University of Nebraska in Omaha, hardly a hotbed of radical CPAs. 

With the flood of complex changes to GAAP foisted upon us in recent years, it’s no wonder that accountants – and our clients – see FASB as a villain. Not only is FASB considered the enemy, but I recently learned that GAAP is the name of an actual demon!

The guidance from FASB is getting more and more complex. In 2018, the entire codification was over 10,000 pages, in five volumes that were more than a foot high. This complexity translates to full employment for CPAs and auditors. But for business owners and other stakeholders, this is incomprehensible and of minimal value.

Following GAAP and getting an audit are what business owners have to do, not what they want to spend money on. After all, what value is an audit report that’s dated three months (or more) after the end of the year?

GAAP is out of touch with today’s economy

The basic format of a set of financials hasn’t changed much in the last 100 years, as Baruch Lev and Feng Gu point out in their book, The End of Accounting. In that book, they put the 1902 financials for US Steel side by side with the 2012 versions. Except for the numbers, the format and the categories are exactly the same. 

What’s changed in the last 100 years is our economy. Back in 1902, businesses were far more reliant on heavy equipment and machinery. In today’s information age, customer lists, patents and intellectual property are more valuable. 

As Lev and Gu point out, the most important things for investors and analysts today aren’t even on the balance sheets. You won’t find contracts, proprietary know-how, and employee knowledge, except as an afterthought in the notes. In our current knowledge economy, the most important asset is the combined skills, proprietary processes and knowledge of employees. Yet the costs for developing “the most important asset of our company – our people” are expensed.

Another big change is the rise of the subscription economy, as Tien Tzuo describes in his book Subscribed. Today, besides all the SaaS applications we have on our smartphones, you can subscribe to almost anything under the sun. Toilet paper, vitamins, dog food, clothes – and even cars! Hertz and Porsche both have subscription offerings that let you swap out cars for a monthly fee. 

But as Tien Tzuo points outnowhere in GAAP-basis financials will you find any of the numbers that are important to a SaaS company. No annual recurring revenue, no customer churn rate, not even the number of subscribers. 

When GAAP doesn’t make sense

Now according to the FASB’s own website, their mission is “to provide useful information to investors and other uses of financial reports.” What a noble goal. But how do you square that with the contradictory results that the head of a SaaS company shared with me when they implemented ASC 606?

Previously, revenue for the implementation phase of a contract was recognized upfront, while the periodic revenue was recognized over time. But under ASC 606, that implementation revenue is recognized over the expected life of a contract. Not a problem if your customers stick around for the entire contract period. But now, losing a customer – which is operationally bad – results in immediate recognition of the remainder of the implementation revenue – which pumps up revenue. 

So, if you give your customers such lousy service that your churn rate goes through the roof, your financials will still look great because you’re pulling all that deferred revenue to the top line. How does that make sense? 

This complexity and irrelevance have led to an increased use of non-GAAP metrics, which are perhaps intended to give investors more realistic information, but in reality, can be manipulated to conceal less than perfect performance. In 2017, 97% of companies reported non-GAAP financials. This likely contributed to the rapid downfall of WeWork – just WTH is “community-adjusted EBITDA??”

The black box that is GAAP

Of interest to leaders of CPA firms, this complexity leads to a value gap between what we do and the value we bring to our clients. Our work has become a black box that they can’t see inside. How many of us have become the reluctant biller, embarrassed to charge a client for complex work that largely remains invisible to our clients? 

If we don’t have the ability to explain the complexity behind the numbers, then our clients indignantly ask us “how hard can it be to put numbers in boxes?” Translating what we do into normal English isn’t generally in the CPA’s toolbelt.

Slay the FASB villain by becoming data storytellers 

FASB and GAAP are not likely to change much in the near future, so our role must be to translate those rules into English. But we can’t stop at explaining FASB rules. GAAP-basis financials are backward-looking. They don’t contain the insights they need to grow their businesses. 

We need to evolve to become data storytellers. As data storytellers, we can guide our clients to slay the FASB villain and help them to be the heroes of their companies. Stories help us connect what’s in their numbers to what’s in their hearts. 

Business owners and entrepreneurs don’t think the way we do as accountants. We have insights into company performance that we’re not sharing. But when we share those insights in story form, we shine a light on their path forward.  

AI and technology remove the human error and the manual effort so we can spend our time on the higher-level work that computers can’t do. With technology tools as our allies, we can 

uncover the hidden treasures in our clients’ numbers. We can show them the real trends so they can make decisions based on data, not just the gut-level instincts they have relied on in the past.

Our superpower is knowledge of accounting. We can help our clients defeat the villain of FASB by using our superpower for good in the world.  

Published in Accounting Today, January 15, 2020