Pete’s Blog

The Importance of Emotional Intelligence in a CPA’s Career

From the desk of Peter Margaritis

This article was originally written for The Georgia Society of CPAs magazine Current Accounts

To succeed in the highly competitive world of financial consulting, accounting professionals must possess the right mix of technical expertise and soft skills – think ‘emotional intelligence (EI).’ As discussed in an article published by Harvard Business Review, EI plays an increasingly significant role in today’s business environment. Therefore, it’s vital that you optimize your EI to improve your bottom line and increase your organization’s job satisfaction, engagement, and retention rates. 

Let’s start by explaining what emotional intelligence is. According to the HelpGuide.org blog, “Improving Emotional Intelligence” EI “is the ability to understand, use, and manage your own emotions in positive ways to relieve stress, communicate effectively, empathize with others, overcome challenges and defuse conflict.” EI helps build stronger relationships, succeed at work, and achieve your career and personal goals. “It can also help you to connect with your feelings, turn intention into action, and make informed decisions about what matters most to you.”

Four components define emotional intelligence: self-awareness, social awareness, self-management, and relationship management.  

  1. Self-awareness: You understand your emotions and how they affect your thoughts and behavior. When you first learned about EI, you had no self-awareness and thought it was silly. A couple of performance reviews brought this to your attention, so you decided to research EI and find ways to improve. One exercise was to write down whenever a situation sparked an emotion. For example, you were happy when someone remembered your birthday. On the other hand, you were angry because you were late for a meeting. Journal two weeks’ worth of data, analyze the data, and increase your awareness.
  2. Self-management: According to a SkillsYouNeed.com blog post titled, “Self-Regulation | Self-Management. This blog is all about how “you control and manage yourself and your emotions, inner resources, and abilities. It includes your ability to manage your impulses, taking responsibility for your actions, and ensuring that what you do matches your values.” This is not masking or hiding your emotions but recognizing and controlling them appropriately. We all have bad days, whether we overslept and were late to a client meeting; got in a fight with our significant other as we were about to login into a virtual meeting; the computer crashed, or dealing with the myriad of other unexpected events that can happen at any given moment. Those who can self-manage their emotions can change their thoughts and attitude into a positive one if they choose. Or they can bring their bad juju into the meeting, office, or lunch and complain about all the things that have gone wrong. Tigger or Eeyore (Winnie the Pooh) will rise up – and you have a choice of whom you want to be in that moment and beyond.
  1. Social awareness: Do you recognize the emotions in others? Do you respond and interact appropriately when you do? Social awareness is about ‘reading’ the emotional landscape and responding with empathy. Empathy is not putting yourself in their shoes; it’s about understanding how that person feels in their shoes. Big difference. According to the PositiveAction article, Social Awareness: An Introductory Guide, “social awareness skills will help us understand professionalism in the workplace, as well as making it easier to share information, communicate, and collaborate with others.” Social awareness is a fundamental part of creating relationships with the people we work with and the customers and clients we need to build our businesses.
  2. Relationship management: In the HelpGuide.org article referenced above, when we understand the top three elements of EI – self-awareness, self-management, and social awareness – and apply them correctly, CPAs can begin “to develop and maintain good relationships, communicate clearly, inspire and influence others, work well in a team, and manage conflict.” Good leadership skills drive a positive mental attitude, a.k.a being an optimist.

The following are some strategies on how to increase your EI. First and foremost, remember that improving your EI requires intentional effort.

Engagement

To retain employees, managers must first understand how people feel about their jobs. Engagement surveys help you assess how content your staff members are at work and whether or not they will stay for the long haul. To help improve morale, you need to listen to your employees’ concerns and address them appropriately. By learning what makes people tick, you can manage each person individually and create EI central to every manager. By regularly measuring engagement scores, you can keep tabs on employee happiness while also taking proactive steps to ensure that employees remain engaged over time. If scores begin to drop off, investigate why and brainstorm ways to bring your team back on board so they stay engaged, excited, and productive for the long term.

Retention

It is crucial to increase employee engagement to reduce turnover and avoid talent shortages. According to the Hay Group, employee retention can help a company achieve a return on investment (ROI) as high as $34 for every dollar spent. But what factors influence engagement? According to one study, three main elements—empowerment, meaningful work, and recognition—can drive engaged workers to stick around even when they’re unhappy with their pay or leadership. However, the company also found that disengaged employees are three times more likely than engaged ones to quit within six months, resulting in lost productivity and costs amounting up to $3 million per year for larger firms.

Improvisation – plays a critical role in EI.

In business, life, and sports, a critical EI skill separates high performers from mediocre/average performers – Improvisation.  Improvisation is vital when things don’t go as planned during a negotiation, meeting, disagreement, or game. In improv and business alike, being able to roll with whatever comes your way will make or break the outcome. It is the ability to adapt to change. It is ‘Yes! And’ philosophy of improv and EI leadership.  There is a widely used quote in improv that describes this philosophy by Keith Johnstone, “There are people who prefer to say “Yes,” and there are people who prefer to say “No.” Those who say “Yes” are rewarded by the adventures they have, and those who say “No” are rewarded by the safety they attain.”

This skill is also crucial for career development. When employees are taught and developed to recognize patterns and manage their emotions during performance reviews or when delivering presentations or dealing with client issues, they learn how to respond effectively to any scenario that might come up. This can be instrumental in employment and everyday life; many believe EI contributes more to success than cognitive intelligence (IQ). Improvisation allows people who may not have a natural knack for talking themselves out of trouble to get creative by thinking on their feet. And by doing so, they practice getting outside their comfort zone and gain confidence that applies in various situations.

Build an EI culture

Think about how you’d build EI into your organization from start to finish. The first thing you’ll need to do is hire people skilled at managing their emotions and reading those of others—and then develop a culture that promotes these skills so employees see the value in developing EI. One way to do that is by emphasizing engagement, retention, and connection. Another is by encouraging improvisation among employees to tackle new projects or work with unfamiliar clients. You could even team up with an expert consultant or coach specializing in improv leadership development to help integrate EI building into your workplace strategy. Whatever approach you take, make sure you are very clear about the kind of environment you are building and what everyone can expect when they enter the office every day—and that it reflects the type of relationships that matter most to you and the organization.

Reflect and report – no, really!

No matter how intelligent you are, you’re not immune to boredom with your job. In fact, according to a study done by Mercer Consulting, 40% of people are actively disengaged at work! While job-hopping may seem like an easy solution to your boredom problem, it has more severe long-term effects. Employees who change jobs multiple times over their lifetime earn less money than those who stick with one employer for their entire career. So what’s an unhappy employee to do? Instead of quitting, commit yourself to improving your emotional intelligence.

Conclusion

An optimist CPA and a pessimistic CPA walk into a bar, and the bartender says, “Is there such a thing as an optimistic CPA?”  The pessimistic CPA says, “no,” and the optimist CPA says “yes, and it is all about one’s attitude and emotional intelligence.” The optimist CPA asks the pessimist CPA, “what do you see/think when you look at a glass filled halfway” – the pessimist CPA says, “the glass is half empty.” The optimist CPA says, “add ice.”

“Originally written for The Georgia Society of CPAs magazine Current Accounts.”

References:
Improving Emotional Intelligence (EQ). https://www.helpguide.org/articles/mental-health/emotional-intelligence-eq.htm?pdf=13508

Self-Regulation | Self-Management | SkillsYouNeed. https://www.skillsyouneed.com/ps/self-management.html

Social Awareness: An Introductory Guide | Positive Action. https://www.positiveaction.net/blog/social-awareness

Building Loyalty Through Quality

From the desk of Peter Margaritis

Sometimes we try to save a buck or two that ultimately may just cost us more in the long run.  

It was the Sunday after the NFL Championship game, and I woke up that morning craving some barbecue. So, for lunch, I went to a familiar barbecue joint and ordered a pulled pork sandwich to go.  The aroma filled my car ride home – love that aroma – wish I had that scent on one of those hanging car odor eliminators.  I love BBQ.  

When I got home and opened the container, although it smelled terrific, something was amiss. I took the top bun off and looked at the pork. The pork was flat dry, and it didn’t look good. I added some barbecue sauce with the hopes of reviving the sandwich. However, when I took a bite, I realized that the bun was stale, and the BBQ sauce didn’t restore the sandwich.  I was sorely disappointed in this pulled pork sandwich and wondered what went wrong.  Then it dawned on me. The restaurant is closed on Mondays.  

Being Greek American, I have worked in several restaurants since the age of 12. Side note: when I graduated college, I thought I would be in the restaurant business for the rest of my life!   Back to the story – I completely understand the relevance of food costs. Restaurants are in a business where the product needs to be sold at a price that will cover the food costs and a portion of administrative costs. That’s the only way to turn a profit. It’s that simple. 

In this case, however, the pork and the bun were both from the previous day – old meat and a stale bun. The restaurant may have helped to control their food costs by doing this, but they created an unhappy customer in the process… a customer who is now most unlikely to make a return visit, and, will share the story with others! Saving a few pennies is not worth losing a customer. In this era of social media, bad reviews, pictures of the disappointing meal, and word of mouth can significantly impact your business.  

In the long run, the person preparing the sandwich should have asked themselves, “Would I eat this sandwich knowing that the quality was not up to standard?”  The answer should be no. However, the company policy might be to first use up yesterday’s food before using what is freshly prepared for that day. That type of policy is not a sustainable strategy. 

We all make mistakes. I get it, and I’m very empathetic to everyone in the restaurant business, especially during this pandemic. And, we must always watch our costs in order make a profit, but revenue drives that profit. If we don’t get return business, we lose revenue, and the business loses sustainability and growth. Period.

However, there seems to be a new way of controlling food costs: shrinkflation.  Using less food to help control food costs. There is a national sub shop chain that has been using this strategy. I ordered a turkey sub with provolone cheese, lettuce, tomatoes, jalapeno peppers, and mustard. What showed up was a sub roll with very little of the ingredients requested.  I have stopped ordering from this chain.  

Now, take this scenario into every business and apply the same analogy. I’ll use the professional speaking business as an example. As I do, think about your business. Have you ever attended a conference or seminar that feels like a canned presentation?  Or better yet, you attend a conference and recognize one of the speakers you enjoyed five years ago. You look at the title of the presentation, and it doesn’t sound like the presentation before. You decide to sit in their presentation, only to realize it is the same presentation that the speaker did five years ago, word for word— it just has a different title. Yesterday’s leftover food – old meat and a stale bun.   As a professional speaker, I customize my presentation to each audience and never do the same presentation twice.  Yes, this takes a lot of work –  and it has been a key driver in the success of my business for 12 years.  I will never serve leftovers to my audience or client. It’s simply not a good business plan or practice.  

The many years I spent in the restaurant business taught me a lot about customer service that I use in my business today.  We all need to remember that we are in the people business. We have no business when we don’t treat our people and customers with the respect they deserve and provide them with a consistent, reliable, and top-quality product or service.  Period

BTW- If you are ever in Bloomington, MN, you must go to Ciao Bella. Ciao Bella understands this philosophy, provides the best customer service, and backs it with a quality product. If you happen to go, ask for Sue, and tell her that I sent you. 

Contact me at peter@petermargaritis.com if you would like to discuss how to increase your customer loyalty.

Accounting Education: Why Power Skills Matter

From the desk of Peter Margaritis

If you’re looking to find an accounting job, you may have noticed that employers often list strong communication skills and sales/client management experience as requirements for their open positions. You might be wondering why these two items are needed if accounting isn’t typically seen as a people-focused industry. The truth is that understanding how to sell yourself– both in an educational setting and in the workplace – can help you succeed professionally in the accounting profession. Technical accounting skills are the foundation of accounting education. However, in today’s accounting profession, technical skills are not enough to grow your career by themselves. Your career growth comes from developing your power skills.  

What are power skills?

What exactly are power skills? The first time I heard the term power skills, I presented an improv workshop to the incoming Master of Science in Accounting students at Oklahoma State University. However, before I began my session, the chair of the accounting department, Dr. Audrey Gramling, addressed the importance of developing their power skills, aka soft skills. You see, this is the mission of Oklahoma State University School of Accounting, which is “to prepare people to make a difference in the world by teaching essential interpersonal skills alongside a high-quality accounting education backed by impactful research and outreach.” And to steal a phrase from Guy Fieri, they are “spot on.”

Power skills are helpful in just about any career and essential to communicating accounting complexities to those non-accounting business leaders. They include aspects like curiosity, self-awareness, empathy, and more. According to The Josh Bersin Company blog titled “Let’s Stop Talking About Soft Skills: They’re PowerSkills, states that, “the skills of the future are not technical; they’re behavioral. Yes, engineers, designers, and technical people need to know how to build and fix things.” The article goes on to state that IBM’s latest research lists the top 5 Power Skills that are most critical to the workforce today are:

1. “Willing to be flexible, agile, and adaptable to change.”

2. “Time management skills and ability to prioritize.”

3. “Ability to work effectively in team environments.”

4. “Ability to communicate effectively in a business context.”

5. “Analytical skills and business acumen.”

Considering how important they are for success both in your professional life and personal development, it makes sense to begin the process of learning these power skills in the university classroom. Being a former university professor, I understand the politics that go into a well-rounded education, and making room for new courses is a challenge. However, if higher education would adopt the first power skill and “be flexible, agile, and adaptable to change,” a solution can be obtained.  

One potential solution is that if your state requires the 150-hour rule to be licensed in your state, then add these power skills courses into the Master of Accounting programs. However, the extra 30 hours, in many states like Ohio, do not have a mandate on the type of courses that qualify.   

Ability to communicate effectively in a business context

A few years ago, my doctor ordered some tests because I was not feeling well. A few days later, my doctor called me, not her assistant, and said she got the results back from the tests. Then she went into this tsunami of medical lingo and gibberish, and I had no clue what she was trying to tell me. So, I said to her, “Doctor, stop! I have no idea what you are trying to tell me. Can you tell me in plain English?” There was a pause, and then she said, “you may I cancer.” Wow. Thankfully, I did not have cancer. 

The experience with my doctor is the same experience accountants have when communicating with non-accountants. Accountants speak the foreign language of business – accounting, which is no different from speaking Spanish, Greek, or Chinese to someone who is not fluent in that language. We need to be cognizant of this fact and become better translators of technical accounting knowledge. We need to start taking the numb out of numbers! 

Translating technical accounting into plain English is not an easy task, and it takes time. Where should we start? I know, in a college classroom! The ability to develop this skill in the safety of the classroom is ideal. The classroom allows us to experiment, fail, hone, and gain confidence. Oh, you are stuck on the word fail. Then think of it as an acronym, First Attempt In Learning. Failure is part of the process when we view learning any new skill. For example, we don’t pick up a golf club for the first time and make solid contact or contact at all. Same with learning new skills. How do you eat an elephant? One bite at a time. 

Change is necessary to be relevant. 

Higher education needs to change how accounting is taught and align it with the critical power skills required to succeed in today’s business climate. Technical knowledge is essential, and a lot of the technical – nuts, bolts, calculations – is done with artificial intelligence. We need to ensure that the calculations are accurate. However, our role as an accountant is evolving into a position of a business advisor and out of being thought of as a number cruncher. Let’s find a way to start this transformation of the accounting profession in the classroom instead of making it the employer’s responsibility. Let’s begin to embrace the term ‘Financial Leadership’ – and teach and prepare with excellence in technical accounting skills and power skills – a win/win for everyone!

If this article resonated with you and you would like to learn more, contact me at petr@petermargaritis.com

Things You Probably Didn’t Know About Flat Organizations.

From the desk of Peter Margaritis

I recently interviewed Rod Morris on my podcast, and our discussion centered around “self-managed distributed network corporate structure, a.k.a. flat organizational corporate structure.  I was immediately intrigued by this idea and decided to learn more about it.  You can listen to our interview on February 14, 2022.  

The traditional hierarchy organizational structure has been around since the 1950s, and so have many of the strategies developed to make it work well. As time goes on, though, some of these strategies are becoming less effective, while others are simply out of date. 

What is a flat organization? A company that doesn’t operate on strict hierarchies like most traditional businesses. In these companies, decisions are made at an operational level rather than from senior executives managers in the C-Suite or regional offices with little contact with worksites employees. Everyone should be involved in developing solutions to customer problems, which means that everyone has an equal say about what customers want.

To achieve the right balance between leadership and organization, here are four things you probably didn’t know about flat organizations.

Not all companies can be flat.

Not every business model is suited to a flat structure. Businesses operating in highly regulated industries, for example, may not be able to eliminate hierarchy and authority structures that ensure compliance with rules and laws. In these situations, it’s OK to be flat-ish. But when your company isn’t in a tightly structured industry, using a flatter organization can help you become more agile and responsive while reducing hierarchy-related costs. And if moving to a flatter org seems impossible today, try making room for some small experiments. Start by delegating decisions from your boss; give employees the authority to make confident choices—without requiring permission from higher-ups first—and monitor results closely so you know whether or not those decisions are right for your business. Just because everyone in an organization has titles doesn’t mean they have power over others; they control their roles and responsibilities.

How to start implementing a flat organization

There are numerous advantages to implementing a flat organization, with notable examples from start-ups like Google. Below are tips on how to start your company down that path. In addition, there is also the advice given to companies already moving in that direction; ideas for keeping morale high and employees motivated within non-hierarchical structures. 

Many companies have tried experimenting with flatter organizational structures, but few have mastered it. Yet some organizations are very successful in doing so; they have implemented policies and protocols which have allowed them to maintain a happy employee base while still producing outstanding results – even without bosses monitoring every move or workers jockeying for promotion. Let’s take a look at some of these positive trends. The last few years have seen an increase in companies pushing towards flatter organizational structures; teams where job descriptions focus more on duties than hierarchy. That’s not to say that everyone’s title is Director of Nothing or Head of Indeterminate Anything. Managers might be reduced, and everyone has an equal say regardless of experience level or tenure at the company.

The ten elements of a flat organization

#1. No strict hierarchical layers; 

#2. Everyone is responsible for what everyone does; 

#3. Each employee’s opinion matters, regardless of rank or seniority; 

#4. Decisions are made as close to customers as possible; 

#5. One-size-fits-all isn’t a good approach. 

#6. Teams across geographies come together regularly, if not daily;

#7. Employees can take their leave whenever they want—and are encouraged to do so 

#8. Employees are encouraged to use their initiative and don’t feel micromanaged; if something needs doing, they take care of it—and are rewarded for it in some cases (e.g., bonuses)—

#9. Employees wear many hats: They might be cross-trained to step into roles occupied by colleagues when someone is out sick or on vacation; and 

#10. Collaboration and teamwork are emphasized within functional areas such as marketing or accounting and across available lines such as between engineering and sales

Rules for Successful Collaboration

We all think that we embrace the concept of collaboration, but ego and office politics kill successful collaboration. In a flat organization, these hierarchies collaboration killers rarely exist, and if they do, they are addressed immediately.      

Collaboration is one of the underlying principles in improv leadership.  To achieve a successful partnership, there must be a foundation of respect for the other party; each party is trustworthy, and each party supports the team. If any of these three foundations are missing, collaboration ceases to exist.  

Here is the superpower to improv leadership with this foundation in place – become an active listener where you are focused on the conversation all the while eliminating distractions, such as internal dialog, biases, and the need to be correct, while removing external distractions, like your smartphone for a starter.  

Finally, adopting the Yes! And philosophy where – Yes, I hear what you are saying, And did you consider… The goal is to move the conversation forward positively and collaboratively.  

Flat organizational structures are not for every organization.  However, can your organization adopt a flat-ish approach and become more nimble by distributing the power and authority to others to make decisions without your approval.  In the book, A CEO Only Does Three Things by Trey Taylor, a CEO works on the company culture, hiring the right people, paying attention to the numbers, and putting other decision-making away from the CEO and to those managers responsible for the departmental expectations.  

Have You Ever Fired an Employee on a Zoom Call? What About 900 Employees?  

From the desk of Peter Margaritis

Yes, 900 employees were fired on a Zoom call, according to the Inc.com article. Frankly, this is a horrible example of leadership.

The CEO of Better.com, Vishal Garg, had told 900 employees to join him in a Zoom meeting. Once everyone was there, Mr. Garg told them that they no longer had jobs at the company. Better.com is an online mortgage company, and the reason for the reduction of its workforce is that the company is going public. So Mr. Garg wanted to create a leaner, meaner, hungrier workforce. And after this firing of 900 employees, he told some of the remaining employees that he did those employees because some were stealing from the company by only working two hours a day.

Now, you can imagine that when the article went public, Mr. Garg received a lot of negative criticism. The CEO tried to apologize, kind of sort of, but several of his company’s executives resigned. His head of communications and head of marketing said, “this is crazy. This is nuts. I’m out of here.” Hopefully, the CEO’s actions are not a form of leadership. It is because he has the authority to fire them. The Board of Directors put the CEO “double-secret probation” and said that Mr. Garg was taking time off effective immediately and the CFO would be in charge of the day-to-day operations.

This was not the first time that Mr. Garg displayed terrible leadership. Last year, Forbes magazine received an email from Better.com employees that was sent by Mr. Garg that said, “You are too damn slow. You’re a bunch of dumb dolphins, and dumb dolphins get caught in nets and eaten by sharks. So stop it. Stop it. Stop it. Right now. You are embarrassing me.” In addition, Mr. Garg had “threatened to set a former business partner on fire, and engaged in hostile exchanges with investors, calling one “sewage” and demanding he divest from the company.”

It’s the company’s culture that you have to work on first and foremost. Better.com has hired an outside firm that’ll come in and do an assessment to find ways to help improve the culture. But the bigger picture is this is privately held right now. Trying to go public. The issue is the leader, the CEO. And you can try to improve the culture, but the only way to do that, in this case, is to fire the CEO and find somebody else to come in and revamp that culture. Because if you don’t fire the CEO, you could hire him an executive coach. You could…It doesn’t sound like he would ever listen. And I’m making an assumption, I know, but he has a history. And that’s just wasted a lot of time and money.

And it was interesting because today, I sat in a Zoom call with a group of people from the C-Suite Thought Leadership Council about leadership. What makes a leader? It came down to just the opposite of what this CEO is doing. A leader is there to inspire those who are employed at the company. How do you inspire hundreds to thousands of people? You can’t interact with all of them individually. However, you can inspire by the tone of your voice. In other words, you can inspire by your attitude.

If you’re in a toxic environment, if you question or make comments, and all you are is ridiculed, you’re going to keep your job and silence yourself or find another job. Intimidation is not a form of leadership. And for those of you who remember Theranos, the Elizabeth Holmes company, that was a sham. Her second in command, Sunny Balwani, had the same leadership style. Berating his employees. Shouting at them. I don’t know about you, but if that happens to me, what tells me two things 1) I need to find another job or walk out immediately and 2) a lot of times when you have that CEOs who have this anger, they’re hiding something, and maybe that’s what ultimately this is. There might be some internal shenanigans going on.

I will admit there is a side of me that wants to send Mr. Garg a copy of my book “Off Script: Mastering the Art of Business Improv. However, I’m not going to waste time, money, or energy because his ego is too overblown. He would write a berating type of review on Amazon, which I don’t care about, but why give him that space? Why give them that voice?

We’re in the people business first and foremost. Now, some of the 900 may have been, lack of a better term, deadweight. They may not be producing as they should be producing. Yes. Fire them with dignity and respect. If you want to be leaner, meaner, workforce, there are other ways. He could have contacted a recruiting company and said, “I need to obtain your services because I have to downsize my organization by 900 people. I’m going to need help getting the jobs for those I have to let go, and the company will pay for them to get that help.” At least have some empathy for those 900 people during the holiday season.

This story of letting people go during the holiday season is heard far too often. I might be naive, but I truly believe that this type of leadership needs to go away and be replaced with something of some type of leadership that has compassion. That looks at their people, those who are productive as an integral part of the organization, and show them respect. When you show respect to your employees, that sets you apart from many other leaders who look at their employees as just a number and something that is easily replaced.

Honestly, employees are not easily replaced. Leaders will even make that statement and still treat their employees like sh*t. The pandemic has proven that we can be working from home and be productive. So, why are some leaders demanding that their people come back to the office and stop working virtually? In my opinion, the leader’s overdeveloped ego is making that decision because, in their minds, they don’t trust their employees. The consequence of that decision is what has been deemed The Great Resignation. What happens when you listen to those in your organization and provide them flexibility? They might stay with your company and not start running out the front door in masses.

Times have changed, and I know this won’t be the last article written about poor leadership. I hope someday there won’t be any at all, and it just goes and goes back to being human. And going back to thinking about a fellow person, being tolerant, and being supportive.