By Ed Chan, Author & Founder of Chan & Naylor Accountants.
Having just under 100 staff members at Chan & Naylor means we have invested an enormous amount of money in Capital. ‘Human Capital that is’. The danger is if you don’t manage that human capital, it could cost you an enormous amount of money. If you manage it well, it could make you a lot of money. In fact hell lots of money. What we do is exactly the same. We prepare tax returns for clients.
But HOW we do it determines how successful we are.
Some firms are tremendously successful while others are not very profitable. Your business is made up of people. These are staff, clients, systems, processes, procedures, and culture. Whenever there are people involved, there is emotional energy. If directed and managed well it produces great results. But if not directed well, it can cost you enormously.
Activities in the form of source documents, client meetings, phone calls, inquiries, prospects, suppliers etc. come in through the front door and have to move and navigate through your systems, processes, procedures efficiently. And then come out the other side as smooth a journey as possible. The more the activities bounce around in your organization, the clunkier it becomes. The more it chews into your profits. Have you ever made a phone call to a government department where you are passed from one person to another until you are totally frustrated and hang up? Talk about an activity bouncing around in their organization and does not come out the other side at all. Some activities do come out the other side, albeit with little profits left.
This typically happens in a lot of businesses and is no different in an Accountancy Practice.
Whenever you involve people into the process, you are dealing with feelings, emotions, ego, and pride. If not managed well, those can cost you a lot of money.
There are three personalities to run a business: Grinders, Minders, Finders
Grinders are great at doing the work. They like to be kept busy but generally, they are not very good at managing their jobs. Do you recognize that type of person? They always appear really busy, because Grinders traditionally are only happy when they are busy. The wrong Grinders sometimes create activities to keep themselves busy like surfing the internet or create activities that give them something to do but produce no meaningful results.