Pete’s Blog

What is the Return on Investment (ROI) for Soft Skills Training?

From the desk of Peter Margaritis

Partners in accounting firms, controllers, and CFOs that I have spoken with over the years about soft skills training have responded by asking, “What’s the ROI?” I know that they are looking for a quantitative percentage but I tend to respond by saying, “What is your ROI without providing your staff those essential business skills?”

Now that I think about it, the term “soft skills” may actually be part of the challenge. What we’re really talking about is what I just referred to … essential business skills. Essential business skills are the ability to negotiate, to collaborate, to speak up and speak articulately at meetings, to manage staff, to engage in meaningful discussions with clients, to network at events and bring in new clients. You get the idea. There’s nothing really “soft” about any of those skills. I think we can all agree that those skills are essential to any firm or business!

Over the years, accounting firms and corporate accounting departments hire accounting graduates and spend a vast majority of their training dollars on technical training and little, if any, on essential business skills.  However, when they are promoted into a management position (at about five years of “technical experience”), their role changes.  They are now required to manage people, grow business, and take leadership roles with little or no training.  This is a recipe for disaster because the learning curve is so steep, and in today’s business environment you want your people ready to hit the ground running, in order to keep your competitive edge.

This was recently outlined in the Maryland Association of CPAs blog entitled “What Got You Here , Won’t Get You There”.  Tom Hood, CEO of the MACPA provides eight key takeaways on how business fundamentals are changing.  Four of these key takeaways resonate highly with me and they are:

  1. The number 1 issue (and opportunity) is talent development. People are the number 1 competitive advantage. Period.
  2. Generational issues are real and need to be addressed.
  3. Learning has changed in both what people need in new skills (yes, those “soft skills”) and how learning is happening.
  4. Collaboration and communication are the most essential skills.

Why are accounting firms, controllers, CFOs, etc. willing to talk about the need for this type of training but are reluctant to provide the training? Is it the desire for a quantifiable ROI? Maybe this will help in your decision-making.

The AICPA’s white paper entitled The Evolution of CPA Firm Learning provides us with some very interesting information. For example, the article states that, “public accountants are in the “people business” requiring practitioners to develop leadership and communication skills and perfect their ability to connect with people, build trust, uncover issues and solve problems. The skills required to practice effectively are no small order. To make a difference for their clients and contribute to their firm, CPAs must make a life-long commitment to learning.” (the passage was bolded in the white paper).  The article goes on to say, “that those organizations that invest in leadership development programs…are seven times more effective at delivering improved business and talent results than organizations with less sophisticated leadership development functions.”

Did you catch that? Organizations that invest in leadership development programs are “seven times” more effective at delivering improved business and talent results. If that’s not ROI, I don’t know what is.

To sum up my thoughts, I turn to the AICPA 2025 Horizons Report that states, “extend traditional technical education to include interpersonal skills. Strong technical accounting knowledge will continue to be a foundational requirement but it alone will not be sufficient. CPAs must also develop problem-solving, communications, leadership, and other interpersonal skills.”

The time is now to provide your staff with essential business skills. What are you waiting for?

Networking – The Mindset

From the desk of Peter Margaritis

In my blog posting titled Networking: Even Accountants Can Mingle, I discussed four networking tips that you can use immediately. I would like to discuss in greater detail some things around tip number one – the Mindset.

The Mindset is all about attitude – having the right attitude, believing in yourself, having a plan, and the simplest thing of all – remembering to smile!

In the months of May and June, I spoke at eight conferences and two in-house workshops that stretched across nine states.  I recognized that I would have the opportunity to meet over 1,000 individuals during this journey. So I devised a plan where I would meet at a minimum five people at each one of my stops. My plan was simple –I would simply introduce myself to people that I didn’t know either at the breaks or after my presentation ended. (You thought my plan was going to involve a lot more than that, didn’t you?)

In early July, I counted the number of business cards that I received over this timeframe, and I have 65 business cards. Wow! (65 cards divided by 8 stops = 8.125 cards per stop. I beat my goal! Now I just need to figure out who was the .125 person I met.)

I started thinking about these people that I just met and a few really stood out:

  • At the Association of Accounting Administrators Conference in Detroit, I met a woman who is a partner in a CPA firm, whose role is the office administrator, and she not a CPA.
  • At the Maryland Association of CPAs Innovation Conference in Baltimore, I met a gentleman who is the managing director of a technology company, which is located in Honolulu and he is a speaker for the AICPA.
  • At the National Association of Black Accountants Annual Convention in Nashville, I met a woman who is from Ethiopia, who is a US CPA, working for a CPA firm in Nashville.

These are just three of the fascinating individuals I had the opportunity to meet and learn about – all in a matter of two months! And all because I made a commitment to open myself up to networking. I had a positive attitude, I believed in myself, I had a plan, and I smiled! Networking really is all about the Mindset.

As the conversation would come to a close with each person I met, I would always end by saying, “please feel free to contact me at any time if I can do anything for you.”

Treat every gathering as an opportunity to meet someone fascinating.  With the right mindset, I know you will.

Want to Connect With Our Audience: Make Them Laugh

From the desk of Peter Margaritis

Earlier this year I spent three days in Las Vegas participating in the National Speakers Association Laugh Lab conference entitled “How to be funnier…even if you’re not that funny now.”

Now I consider myself a pretty funny guy, but I’m always thinking of ways to incorporate more humor in my presentations. Why? Think about the presentations you’ve attended where you actually enjoyed yourself. Where you laughed a little – or a lot. You remember them, don’t you? More importantly, you probably remember at least one important thing the speaker was trying to communicate with you.

Humor does that. It connects you with your audience and your audience with you. That connection helps your audience absorb – and more often retain – the information you’re trying to communicate. There was an Ohio University journalism professor named Mel Helitzer who said if we can open students’ mouths with laughter this will allow us to spoon in knowledge. I’ve embraced that philosophy as an instructor and speaker, and I can tell you – Mel was right.

At the Laugh Lab, I met people from all around the United States including an Emmy award-winning comedy writer, stand-up comedians, motivational speakers, dentists, life coaches, authors, a PhD in psychology, engineers, and even accountants like me. We all had different backgrounds and experiences and different reasons for attending the conference, but at the core, we were all there for one reason – to learn more about humor and how it can make us better at what we do.

As I was traveling back to Columbus, I thought of four things that I could do to enhance my upcoming accounting and auditing update presentation based on what I learned at the Laugh Lab.

  1. Redefining frustrations. Like most of us, we tend to rely on PowerPoint to get our message across. You may not know this, but PowerPoint is actually a Greek term meaning “you are getting very sleepy.” This is a method called redefining frustrations where you take a topic like PowerPoint and talk about what frustrates you about this topic. You can strategically place these “redefining frustrations” throughout your presentation at points where you think your audience may be glazing over quicker than a Krispy Kreme doughnut.
  2. Use anagrams. An anagram, according to dictionary.com, is a word, phrase or sentence formed from another by rearranging its letters. For example, if we took the word DOG and rearranged it, we could come up with the word GOD. There’s a website,http://www.anagramgenius.com, where you can plug in any word phrase or sentence and instantly create an anagram. I plugged and lease accounting and the anagram that I got was “Clean-cut, agonies.”
  3. Comparison humor. This is where you take a topic and either compare the topic before and after OR take two topics and compare them to each other. For example, this economy is really scary; it has really changed my goals. Before, I used to save money, now I print money.  Or, men and women have different ideas of what they want in a relationship.  Women want a commitment and men want the remote control.
  4. Rule of three’s.  This is where you take a topic and list three things about your topic BUT the third on is the funny one.  For example, it’s scary how being broke can just happened. There are three signs that you’re broke. One is you can’t get money out of an ATM, two is your banker won’t return your phone calls, and the third is twitter is too expensive.

Try one or two – or all four – of these techniques in your next presentation and get your audience laughing! There’s no better way to help them stay focused, alert and engaged. And better yet – they’ll remember what you’re trying to communicate with them. So go ahead. Make them laugh and spoon in that knowledge.

Finding a Simpler Way to Communicate a Complex Topic

From the desk of Peter Margaritis

Everyone’s heard of the KISS principle, right? Keep It Simple Stupid! Now I don’t necessarily like to use the “s” word – if you’re a parent, you’ve likely gone to painstaking efforts to get your kids to not use this word – but I really like this principle, and it’s something to always keep in mind when preparing a presentation.

Last month I presented a 90-minute A&A update for the Arizona Society of CPAs and one of the subtopics dealt with consolidation (topic 810): principal versus agent analysis. Basically this section was addressing the proposed rules on the consolidation of variable interest entities (VIE). I’m not sure if you know this, but a variable interest entity comes from the French term meaning “damn you Enron.” There are hundreds of pages of guidance in the current codification on how to consolidate VIE. This guidance is very complex.

As I was preparing for this presentation, I knew that I needed to find a simpler way of explaining this new proposed update because I wanted my audience to understand and retain this information and – just as importantly – I wanted them to stay awake during the section of my presentation!  Just saying the words “variable interest entities” can put an accountant to sleep in a nano-second. Also, the demographics of this conference consisted of a few SEC filers with the majority being in public accounting with clients that are privately held entities.

So, after spending some time trying to figure out a simple way of explaining this very complex topic, I came up with a scenario that I thought my audience – at least a vast majority –could relate to.

Here is an example of the KISS principle in action …

Your mother-in-law is a VIE. She collects social security, some investments, and slot machine winnings (and losses) but she is primarily being supported by her six children. Some of the siblings are providing more than others, but your family is providing the most. Your spouse likes to be in control and likes to make decisions as demonstrated by her position as a school principal. Your spouse wants her mother – your mother-in-law – to move in with your family. That’s right, your mother-in-law will be living with you 24/7.

Does your mother-in-law consolidate and move in because your spouse is the decider and is using her power as a principal over your mother-in-law and related parties? Or, will an agreement be reached with the other siblings whereby your mother-in-law will spend equal time with everyone and your family will share power and thus have an agent relationship?

Under the current proposal, there is a qualitative test that I call “the feelings test” which consists of three questions, just like the three questions the bridge keeper asked in Monty Python and the Holy Grail. This is very different than the current quantitative test, a.k.a “no feelings, just the facts test.”

These “feeling” questions are along the line of:

  • Who else has rights? The other five children have rights and individually and collectively could be considered agents.
  • Has your family received compensation (chicken soup, knitted sweater, or season tickets to the Cincinnati Reds) from your mother-in-law?
  • If so, what is the magnitude and variability of the compensation?
  • Is this compensation different than the compensation she is providing to the other families?
  • Finally, are you seeing positive returns from your investment in her gambling habit or have you just help absorb the losses or both?

The answers to these questions, based on the judgment of the decider, will determine if your family is the principal or an agent. In other words, the answers to these questions will help determine if your mother-in-law will move in permanently or just visit for a couple of months.

I got laughs, engaged eyes, positive head nodding, reduced smart phone praying, active listening ears and just general interest in this very complex topic. So the next time you try to deliver complex information, just remember the KISS principle – use less technical jargon and more every day scenarios to demonstrate your point.

Networking: Even Accountants Can Mingle

From the desk of Peter Margaritis

Now that our eyes are adjusting to the sunlight rather than the glow of florescent light we’ve been subjected to since early January, it’s time to get out there and start networking.

That’s right – networking!

If the thought of “networking” makes you sweat, it’s time to re-think what networking really is. It’s really pretty simple. Anytime you’re at an event or even a meeting where you don’t know someone, you have the opportunity to network. It’s about introducing yourself and getting to know someone else. At any business function, introduce yourself to somebody you don’t know. At a CPE event, introduce yourself to someone you don’t know. Attending a conference? Introduce yourself to someone you don’t know. (Noticing a theme here?)

Today I want to give you four networking tips that you can apply immediately.

  1. The Mindset. This involves having the right attitude, believing in yourself, having a plan, and the simplest thing of all – remembering to smile.  By taking just a little time to get in the right mindset, you’ll have a lot more confidence walking into that event. And, simply smiling can make anyone more approachable! As Victor Borge once said, “A smile is the shortest distance between two people.” And what did I mean by “having a plan?” Any gathering of individuals – no matter how large or small – I view as an opportunity to meet someone and I set a goal of trying to obtain at least 5 new  business cards. Make a plan or set a goal like that for yourself.
  2. The Preparation. As accountants, some of us tend to be more introverted, so in order to make meaningful connections, preparation is key. Preparation means doing your homework – listen, read, watch. What’s happening in the news? What’s going on in your community? What’s going on in the profession? After you have answered these questions, formulate five or six questions that you can use to start a conversation. Let’s say I’m in Cincinnati … I’d probably start off the conversation by asking someone if they’re a Reds fan and if so, what do they think of their prospects this year to win the division. An easy opener that’s sure to get the conversation going.
  3. The Implementation. Don’t be shy. Walk up, stick your hand out and introduce yourself. “Hi my name is…..” (I have yet to do this and have someone shriek and run away from me.) And this is important – engage them by being curious about them. Ask questions to get them talking about themselves. This is a great way to break the ice and create rapport with someone. Some conversations will be great and some may be non-starters for whatever reason, but the more people you talk to, the more likely you are to make some really meaningful connections. The key to effective implementation is to be a good listener with both your eyes and ears. I’ve actually walked away from people who were talking to me but weren’t listening to me or they were looking around the room to find others. To me, that just shows a complete lack of any genuine or sincere interest. So, if you’re not interested in continuing a conversation with someone, politely excuse yourself and move on.
  4. The follow-up. One of the most critical steps in just about anything we do – including networking – is following up.  I like to send a handwritten “nice meeting you” card within a couple of weeks of meeting someone. I also like to forward interesting article links or something I’ve learned more about regarding their interests or their business. Sometimes I’ll pick up the phone call the person to see if we can schedule time for coffee or lunch just so we can get to know each other better.

I said I had four tips, but here’s a bonus one for you. I like to call my approach to networking – “the Godfather approach.” I always end a conversation by saying, “please feel free to contact me at any time if I can do anything for you.” Because as in the movie the Godfather, if I do this for you, someday I will come to you and ask you for a favor.”

Now get out there and start networking!