As CPAs, we live in a fast-moving, highly complex world. Ironically, one of the hardest things we have to do is make things simpler. But simplicity is what allows us to declutter our minds so we can stay laser focused on the few things that really matter to our clients, to our teams, to our families and ultimately to ourselves.
John Spence, author of the book "
1. Passion: If you don't love what you do, it's hard to muster the motivation to become world-class at it.
2. Patience: It's about putting in the time to master a skill, a la Malcolm Gladwell's 10,000-hour rule.
3. Practice: It's not just putting in the 10,000 hours (see No. 2 above). It's about deliberate practice. Every time you practice honing your skills, you're practicing a little bit harder, going outside your comfort zone and never resting at one level.
4. Pattern recognition: Spence reads 100 to 120 business books a year and has spent his entire career looking for patterns in business, coaching and other areas of life. After culling all that information, he asked himself what the common themes were that kept coming up in his research. After 30 years of studying and advising successful companies and training their leaders, Spence found the best organizations had four key attributes which he expressed in the formula below:
[Talent + Culture + Extreme Client Focus] × Disciplined Execution
By the way, this formula works just as well for sole practitioners and two person firms as it does for Big Four firms:
1. Talent: Spence believes the quality of your business is directly tied to the quality of the people you hire, nurture and retain at your organization. Even if you're a solopreneur, your firm's success is tied to the caliber of the outsourcers and vendors you ultimately work with.
2. Culture is a balance of two things:
(a) A culture of engagement: People do their best work when they like what they do, enjoy their job, enjoy their co-workers and take pride in their organization.
(b) A culture of accountability: People deliver the work they've promised to deliver on time and exceedingly well.
3. Extreme customer/client focus: Really understanding the needs, wants, worries and desires of the people that pay all the bills.
4. Disciplined execution: Following through on the strategies and plans they've developed.
Types of leadership quotients
To make the formula above work, it all comes down to a firm's leadership. And while Spence believes honesty, integrity, vision and courage never go out of style, he asserts that today's leaders also need to have a well-developed IQ, EQ and AQ.
- IQ (Intelligence Quotient): IQ is not just about a leader's raw intelligence, but their managerial competence. This means that leaders must be constantly honing their skills, learning, and pushing themselves to improve.
- EQ (Emotional Quotient): The ability to make genuine connections with people, to show empathy, and to show clients you're not only highly competent, but that you truly care about them.
- AQ (Adaptability Quotient): AQ is your ability to move fast, to learn quickly, to pivot, and to be a voracious learner. AQ is also about your ability to unlearn things quickly when it comes time to change. Spence has found that leaders with a high AQ handle ambiguity well and have the courage to look at things that no longer work and to admit they're not on the right path going forward.
Spence said AQ is often the hardest of the three quotients for analytical business leaders to develop since they're highly regimented, disciplined and rules based. As a result, they're inclined to power through a tough situation the same way they always have instead of looking for a better solution or strategy. When faced with something perceived as "negative change," Spence said many leaders go through the same cycle of fear, denial, anger, bargaining and ultimately depression that they would if a close friend of a family member had died. According to Spence, your AQ is your ability to look at change objectively. Rather than reject it, you must tell yourself: "I have to go through this tough transition in order to move forward."
My struggle with AQ
Personally, I've always been confident in my IQ and EQ, but it has taken me a lot longer to develop my AQ. Until five years ago, I was managing partner of the firm I founded. Managing day-to-day operations is not necessarily my strong suit, but I've been at Tri-Merit since day one and didn't think anyone else had a better handle on the big picture and what was best for our firm. Eventually I realized it was my ego talking, not the rational side of my brain. Only after suffering a stroke seven years ago did I realize that it was too much for me to keep serving clients, while managing the firm and trying to grow the business. I was putting in the time, but not doing it very well.
During my recovery, I took a long hard look at what I'm really best at and most passionate about. I realized my skills were based on going out and educating fellow members of the profession about tax credits and incentives. I really love traveling and evangelizing about tax credits and incentives as well as speaking, writing, consulting and of course hosting my podcast about them. I never would have come to this rationalization if I hadn't suffered a serious health setback triggered from the stress of being stretched too thin and not being the best leader and professional I needed to be.
Improving your leadership quotient
Spence has found that IQ, like EQ and AQ, can be improved. With IQ, you can't raise your number per se, but he said you can increase the amount of information you take in — you can read, listen to podcasts, attend classes, teach and mentor others, etc. to hone your professional acumen and knowledge.
Spence said EQ can be improved by gaining more self-awareness, more self-regulation and more empathy. Since many leaders struggle with anger, for instance, EQ can help them identify what triggers their anger and how they regulate themselves to respond appropriately. That's all part of empathy.
Improving AQ takes place by stepping outside of yourself and looking at things objectively. It's about telling yourself: "This is what's happening to my market and my firm. This is what's happening with my clients. This is what's happening with technology, etc." Spence believes leaders with strong AQ will say to themselves: "Here's what I have to do to make it better. I will put my head down and I will fix this."
After three decades of working with highly successful people, Spence said two traits keep showing up in his work:
1. They're not afraid to ask for help. Asking for help is not a sign of weakness. It's the opposite. Spence said very successful people are great at asking for input, feedback, advice and suggestions. They don't claim to know everything; they draw wisdom from others.
2. They become what they focus on and the people they surround themselves with. "Fill your mind with wonderful ideas, valuable knowledge and uplifting information," advised Spence, and "surround yourself with smart, talented and supportive people." Doing these two things consistently will have a huge positive impact on your life, he added.
Accountability is a word that gets tossed around with abandon these days, but being accountable to yourself is one of the most valuable skills any CPA or leader can have. Hopefully it won't require a life-threatening day of reckoning like I had, but you can get into the habit of asking yourself at the end of each day: "Was I the best possible version of myself that I could be?" Be realistic about where you can improve. Surround yourself with the right people to get you there and ask for help, input and suggestions from all levels of your organization.
