[INTRO]

[00:00:01] ANNOUNCER: Welcome to Branch Out, a Connection Builder’s podcast. Helping middle-market professionals connect, grow and excel in their careers. Through a series of conversations with leading professionals, we share stories and insights to take your career to the next level. A successful career begins with meaningful connections.

[00:00:22] AD: Hey, everyone. Welcome to Branch Out Podcast. I’m your host, Alex Drost. Today we're joined by Gary Thomson, who brings 35 plus years of experience, and is a consultant to CPA in professional services firms focused on helping organizations of all sizes prepare for the future by developing partner level leaders, building innovative governance structures, and crafting leading edge strategic plans. We discuss how technology is changing the competitive landscape for CPA in other professional service firms. Gary shares why he believes that innovation is driven by curiosity and supported by discipline. I hope you all enjoy, 

[00:00:59] ANNOUNCER: Connect and grow your network. We are on LinkedIn. Search for Connection Builders.

[INTERVIEW]

[00:01:06] AD: Gary, welcome to the Branch Out podcast, excited for our conversation today. 

[00:01:10] GT: Thanks, Alex. Likewise, I'm looking forward to it. 

[00:01:13] AD: Gary, let's start with just having you share a little bit about your background and what you do today. Then we'll take the conversation from there. 

[00:01:21] GT: Yeah, sure. Thanks, Alex. I have spent 34 years in public accounting, both with the big eight, which dates me a little bit, to starting my own firm, and then having the privilege of seeing that firm grow and doing a lot of M&A activity, and ending my public accounting career with DHG, which is now part of FORVIS, as you know. 

Then in 2019, I had the opportunity to retire from public accounting, and now serve as a consultant to the public accounting industry, practice management, leadership development, and coaching with CEOs. A lot of strategic planning, as you know, is going on in our profession right now and then likewise served on the AICPA council. So keeping my finger on the pulse of what's going on in the CPA industry. 

[00:02:03] AD: Let me ask you a couple questions about your career path. So first off, what area in accounting, what was your practice area? 

[00:02:09] GT: Well, when I began my career, it was all audit. It was fairly well niched, but as a sole proprietor you did basically anything that you could do to grow the firm. As the career went on, I really was a generalist, about 50% audit, 50% tax. Then as we got larger, and my leadership roles became more substantive, I really peeled back from a lot of the day-to-day, billable work and became more geared on management and leadership. That was really probably the last 10 years of my career, I was more focused on that. I still consider myself, I'm still CPA, kept the credentials, work hard to keep the CP and do all that, but pretty much would more closely identify as an audit person over my career. 

[00:02:49] AD: Well, I love it. What's the biggest change you've seen? The industry's changed a lot. What are some of the big change items? 

[00:02:54] GT: Sure. You know, I don't want to sound too antique, but part of me realizes that when I walked in the door to Arthur Andersen in June of 1985, the big celebration was that we had one laptop for every engagement team, which is generally three to five people. That was the big news. So when we look back at the revolution in technology, we wouldn't think about PCs and laptops being revolutionary, but then it was. So the processes that we did, all the things that I was assigned to do as a rookie, are things now that generally speaking, technology takes care of. I know technology is a broad, broad word, but that's the only word that I can use to really talk about what's revolutionized at the most, since I walked in the door. 

[00:03:37] AD: Well, think about it. For anyone who is in the sub 40 category, a bulk of their career has probably been in and around a computer, right? If you're in the CPA world, you've used it in one way or another and today, I don't know about you, but I can't remember the last time I did anything without my computer. If not, I have my phone or my iPad, so I have some other form of it, right? I don't even think I can add any more without a calculator on my phone, right? But think about trying to do the work. I understand that there's been nuances to the work where it's changed to become more complex as technology has allowed it to, but the work you were doing 30 years ago wasn't so simplified that doing it without a computer would just be it almost seems crazy today to imagine what that would have been like.

[00:04:20] GT: It is. One of the first clients that I worked on was self-insured, not to bore all of our listeners and watchers with that, but they were self-insured. So you relied on a lot of actuarial data. Of course, we were still wearing white shirts and ties back then. It wasn't unusual for you to take the 14 or 21 column sheets of paper and actually tape additional columns on there, because of all these very detailed actuarial schedules that you were working on. Think about doing that by hand.

Now, they didn't have systems to produce that either, so what we did match is essentially a lot of their technology, but yes, I think back on doing that now, all my tax colleagues would talk about, “Individuals should learn to do tax returns by hand, and they would do it right.” I go, “Well, yeah. There's an element of that. That's correct, but they wouldn't be able to do it with all the data that we have now.” Yeah. You can probably take par versus par then and par versus par now and say there’s whole lot more to deal with. 

[00:05:18] AD: Yeah. I can't imagine. It's fascinating. Where do you see – I just, I want to pull from some of your wisdom around here, where do you see the biggest changes going forward from here, right? I would argue, I think we're saying the same thing. Technology has been one of the big changes, right? Technology, the disruption that technology has caused in the last 30 years has changed the industry. Are there any other major changes? What do you really see, looking forward? 

[00:05:42] GT: I think, there's major changes, but I also want to level set on some things that have stayed the same. So when I walked in that door in 1985, we were talking about technology and how much it was going to change the profession. We had minority outreach efforts going on. We had women in the profession outreach going on. Does any of that sound familiar, Alex? I mean, we're dealing with the same things now 39 years, or whatever it is later, 37 years later. So there are certain things that will just stay as imperatives, that we always have to keep our attention focused on, that we as firm leaders need to be thinking about every day when we get up, but at the same time, there’s been acceleration in certain areas such as technology. 

When you think about EY, one of the big four who has bot technology to work on tax returns and what that's doing to transform the way we think of tax returns. We thought 20 years ago, when we used scan technology to increase efficiencies, we had arrived. Now we have bots, robots, for all intents and purposes, with artificial intelligence embedded in them, who are spitting out very complex tax returns. EY doesn't do many simple tax returns. The pace of those type of changes, when, let's just say even 10 years ago, when the big four would work on a new technology, maybe even the next 21, let's just say one through 25, that technology would take three, four, five, seven years before it made its way to the rest of the firms. 

Now we're seeing that technology that's developed at these top firms begins making its way a lot quicker, 12 months, 18 months, so just the adaptive pace of technology. If you and I had this podcast in February of 2020, we couldn't even begin to have imagined the rapid acceptance the CPAs head of technology. We would have said, “No way.” If you would have said we could do an audit with inventory and sense of risk, and never going out and counting the inventory in person, we would have said, “You're crazy.” There's no way we could have done it. 

Our ability to adapt is showing all firms that we need to adapt more. I'm sure we'll talk about this as our time goes on, but this whole rustle for capacity, what do we do to solve the capacity conundrum embedded in it? We've got to embrace technology, we've got to clean up and have more consistent processes, we’ve got to think about outsourcing, we've got to think about a number of things. So the pace with which we're required to respond to these things is so much faster than it was, certainly when I came into the profession, but even where it was three to five years ago.

[00:08:14] AD: There is no question there. In speaking for my industry, my experience around technology, any listener knows that I started this podcast during COVID. I had left my previous career in investment banking the year before, and had planned to build a business that had something to do with technology and delivering content. I cannot begin to describe, one, how little I truly knew. I'm a pretty geeky, techy person that still knows very little. I'm not a programmer. There's so much of the internet and the computer world I just don't understand, but I have a pretty good grip. My wife would call me a nerd, that's for sure. It still blows my mind, how fast it's changing, how accessible it's becoming, and the rate at which the innovation is taking place. It did nothing but drastically accelerate through COVID. 

My own is sitting front row in my business around it. The acceleration of adoption around technology as a whole is crazy. For anyone who is, say again, 40, 45 or older. Actually I'll say this broadly speaking for anyone, because I'll put myself in the same bucket, for anyone who thinks that you're really good at technology, recognize that there's probably a lot you don't know, and look to a younger generation and just realize how different technology is generation by generation, the adoption, the use, and how it affects what we do on a day-to-day basis. 

[00:09:38] GT: Absolutely. We have a nephew that's in the technology world and mainly in the cybersecurity piece of it and when you talk to him, not only about the risks in cybersecurity, but just technology in general, it's just amazing. It's mind blowing. To your point, I feel like I've got a pretty good handle on all the things that I certainly need technology for, but again, the rapid changes and evolution. For the CPA who thinks only internally, that's one thing, but if we don't adapt to meet the needs of clients, we will significantly be at risk. 

I have a really good friend who's CFO of a company. He will say the best thing about COVID is that his CPAs no longer come to his office. This is a fortune 100 company and their firm recognizes that they need to listen to the client and to adapt. So what a great example of a large company, large fortune 100 company, big four firm, who sat down and said, “How can we use technology and other things to meet your needs?” And reimagined what it was like to have that client and CPA firm relationship.

[00:10:43] AD: I think we're geeking out on technology which wasn’t even our planned topic, but we'll get to that in a moment. I get passionate about this. I find it so interesting, because technology, one, when we say, because it's a very loose term, it's something that I say that we have a tech enabled platform or tech enabled business, what the heck does that mean? Right? I think everything's tech enabled in some ways these days. It's how much do you lean into it and leverage it? Oftentimes, what it really is, is the adoption of the forward-thinking approach to leveraging some system process and orderly approach to effectively and efficiently accomplishing the work that's in front of you. However, that might look right. 

[00:11:18] GT: Yeah. That's really well said, and that dual responsibility of looking at your internal processes, but also responding to your client is where I think firms are actually getting done pretty well. They're saying, “How can we adapt to make it easier for you, client?” Then what does that mean for us? Do we have the resources to support it? Also of course, in the CPA world, especially in medium to smaller firms, client accounting services, CAS, and most firms have become a growing part of it, and there's this conundrum that firms wrestle with of, we're going to use any technology that our clients want to use, versus this model that says, we're going to adapt our technology and have everyone gravitate to that. Neither is right or wrong, but it says a lot about a firm in terms of the way that we adopt such technologies to either make it better for us, make it better for our clients, or for our staff to learn consistency. It's the world right now, right?

[00:12:11] ANNOUNCER: This is Branch Out, a Connection Builders podcast.

[00:12:19] AD: Well this will now tie into our conversation. Talking to listeners for a minute here, Gary and I jumped on here today to talk about curiosity. That was what we had planned was the idea of the value of curiosity. I didn't, I wanted to just ask a couple questions and we obviously went down a great rabbit hole there on technology. What I find really fascinating is, I think, technology, wanting us to be curious to embrace those changes, but the challenge is, it's almost nonstop and every will continuous change and change is really hard. With that, let's open up on this discussion about curiosity and let's tie this all together. 

[00:12:51] GT: You know, David Maister wrote a book, True Professionalism, many years ago, at least 30 years ago, maybe a little bit more. So when you look at the crux of that conversation, he talks about three types of individuals: cruisers, losers and dynamos. Let's just focus on the dynamos for now. The dynamos one, of the things that he brings out is that they have this insatiable curiosity. They want to find out how to do things better, how to do things in such a way to make the organization better, how to improve personally, etc. etc. So even though that book was written all those years ago, before any of the stuff that you and I just talked about could even be imagined, it still is so applicable today. 

Having that healthy curiosity about, how can we embrace technology better? How can we think about all the adaptive things that we need to be doing, whether it's remote work, hybrid work, whatever it may be? How do I make myself better at what I do? How do I look at where the market is going versus what we're doing in the industry right now and think about, “Well, maybe that's for me, maybe I can play that new role in this new service area that CPAs are contemplating.” The curiosity, whether that was from 30 or 35 years ago, whether that's from 50 years ago, whether it was from 30 minutes ago, still remains as a vital part of any successful leadership dimension, career progression, and for a firm to stay on top of what's going on in our industry. 

[00:14:16] AD: I think many of us would agree that continual learning, which I think is essentially curiosity, right? That the willingness to always want to learn, the willingness to accept new ideas, not believe that you have it figured out. In your work and your experience, where do you see the challenges? What gets in the way for people to embrace that on a day-to-day basis? 

[00:14:38] GT: Alex, I don't know about you, but sometimes curiosity can be fatiguing. 

[00:14:42] AD: I think they said curiosity killed the cat. 

[00:14:44] GT: Yes. Yes, and it can wear you out. There's so many things from, again, technology, which we've talked a lot about to restructuring of business models and what that looks like to what are the services of the future and where our businesses will be disrupted in new ways. So what I think curiosity has to be supported by is some level of discipline, and strategy. Within an organization, we don't need everyone and being curious about everything. What we really want are people identifying what are those areas that I want to be most curious about and does that align well with where my organization needs me to be focused?

In that organization, Gary and Alex may both be super curious people and curious about everything, but if we understand that Alex's curiosity is best suited for this organization chasing X, and Gary's is best suited chasing Y, we have strategy, we have an alignment, and we have curiosity. There's so many firms that I go consult with, Alex, that are chasing every shiny new object, and I get it. This is not a critique, but they're dizzy by it. There's a lack of focus by it. Our people are worn out by, I call it initiative fatigue, a bit like curiosity fatigue. So there has to be some discipline to be able to have a healthy way of assimilating that curiosity. 

[00:16:07] AD: I want to dig in around, let's talk about this on an individual level, then I want to come back and talk about organizationally. Individually, and I liked that you said, curiosity and discipline together, because I think that there needs to be a healthy balance. I'm going to, maybe we'll turn this into a quasi-coaching session for Alex here, I'm going act as an individual entrepreneur, I'm going to speak through the challenges that I see in my own life and I'm going to try to tie this into as a professional, right, because obviously, my work is slightly different than the CPAs today, but understanding from my previous life, it's largely, we do work, we're busy, we're constantly trying to balance what we have to get done and what we have to learn, right? 

As an entrepreneur, my challenge is, I'm always curious about the next opportunity. The next and in particular, again, around this idea of technology and technology evolves fast, and it's really, how can you take what you're doing and always look for continual improvement, continual ways to generate better outcomes, or more effective and efficient outcomes of what you're doing? That's the curiosity of doing that. I have to, and it’s where I think the discipline comes in, I have to balance that with execution, right? Vision is one thing, but vision without execution leaves nothing, right? It's a good idea, but the disciplines, the execution, oftentimes. How do you on an individual personal level balance that, thinking about what you have to do in doing it, right? If I can boil it down that simple, right, thinking about it versus doing it. How do I balance that? 

[00:17:31] GT: I think there's two contexts to that. First is the true sole proprietor entrepreneur who doesn't necessarily have a corporate structure of accountability and reporting to them. They may have personal coaches, but there's that element. Then the second element that I'll address is within the context of an organization. Let's get to the first. You and I are, we're entrepreneurs, right? We don't have the boss to talk to every day about it. So we have to figure out ways of being disciplined and to be able to, as you said, set appropriate limits on how much exploration do we do? How much delivery of services or work do we do? What does that look like? Then the other things that are important in our business as well, client development, etc. etc. So there has to be a thought process, a discipline to doing that. 

Look, I'm not going to be overly prescriptive on that, because each of us find different ways of doing that. You may laugh at the way that I tend to do that, in terms of how and what you do, and what you don't document. I do know this, Bill Gates, this isn't a Bill Gates fan club comment, but it's something that I admire about him. He always talked about that time that he went away and shut everything off and thought and dreamed. He had a specific amount of time each year that he did that. 

The point of that that's analogous to you and me is we have to do that. We can find ourselves sucked into the tyranny of the urgent, of doing podcasts, of delivering client service, of taking phone calls, etc. and we never sit back and say, “What should I be thinking about? What's the wave of the future? What are the things that are going on that could be potentially disruptive, that I might be able to take advantage of and or present challenges to my current business model?” 

Goal setting in that context, however that may work best for you. In many cases, it's getting an outside coach, or just getting a friend who's willing to do that, presenting a business plan once a year, even if it's to yourself, right? Just the whole process of sitting down and developing a business plan, setting goals and holding yourself to that takes on form and fashion. That's on the sole proprietor, individual entrepreneur side. 

[00:19:35] AD: I want to make one quick comment there before, so in speaking to, and before we go on your next part, for even for many individuals, many professionals that may work under some a corporate structure, oftentimes, especially if you are in mid to late career as a professional, you smell more like an entrepreneur than an employee many times in terms of what your day-to-day life is, right? You have a lot of autonomy, a lot of freedom, a lot of flexibility right? 

Your point that I think is really, really important there, you said, “Going through the process of actually writing down a plan and writing goals for yourself.” A business plan, there's many different ways to do it, but actually writing something down, going through the exercise of creating a true plan and written goals for yourself. Then creating the boundaries to block off and say, “I'm going to spend X amount of time here, X amount of time here, X amount of time there. I'm going to hold myself accountable to doing all of those, including the recharge, refresh the non-productive elements of work.” 

It's all really intentionality in a very structured approach. Everyone, I think, can benefit from that in their lives. Obviously, the more autonomy you have, the greater that matters. Am I thinking about that the same way?

[00:20:45] GT: Absolutely. Look, the hamster wheel is real, right? It really is. 

[00:20:49] AD: And it spins fast.

[00:20:51] GT: It does. You just jump on it and you go. Some days, you have every intention. I tell people all the time, when I was in public accounting, I'd pull my car in the garage at the office, get on the elevator, and I had every intention to be the most positive, optimistic solutions oriented, and then you got out the elevator and something was waiting for you, whether it's a client or staff or whatever. There does have to be some intentionality around that. 

Again, going back to the lack of prescription, I say that because we all need different mechanisms to make us accountable. There's some people who just naturally just super disciplined around things, and they only need a little bit of something. Then there are others of us that really need more to frame it out. Like you, I do a lot of public speaking, oftentimes, if I have a really significant speech, I'll actually script it, never to actually take to stage with me, but it allows me to really cement in my mind where I'm going and what I'm thinking about and in many ways, that's our business plan that we're talking about, right? It's the process of going through that, that adds the value. Then the discipline around sticking with it is the secondary element to it.

[00:21:59] AD: We could probably do an entire podcast on this, right? It's having awareness of what drives you, and awareness of what your stress levels are, and how you cope with the challenges of the unknown. If you have a grip on those things and you focus on doing the right activities to work with an alignment of that. All of this is way simpler said than done, right? 

[00:22:21] GT: It is. Let's just use the word flexibility, right? You want to be able to be flexible within the context of that plan, because hopefully, once in a lifetime, only COVID happens. But let's just leave COVID out of it. Something happens, it knocks us all. That's one element, but on the other hand, what I find is that we give ourselves too much flexibility at times, and we never get to execute it. So it is about finding that right balance to that, right? You don't want to wrap yourself up so tight that you can't respond to opportunities, “That's not in my plan. I can't do it until next year when I rewrite a plan.” Well, of course, that's silly. We don't want to ever be responsive, but if we don't have a plan or don't have any prescription around anything that we're doing, well, then everything could look great to us or everything could look bad, either extremes.

[00:23:03] AD: The dichotomy of life, right? 

[00:23:03] GT: Absolutely –

[00:23:05] AD:  Let's go back to, okay, so we need now, as an individual who's within a corporate structure, how do we create some of that discipline to allow for the curiosity? 

[00:23:13] GT:The first thing, you and I talked about this a little bit offline before, but the first thing is, we have to know corporate strategy. I can come up with the best laid plan for Gary Thompson, but if it does not align with where the firm is going or the corporation is going, then it's meaningless. It serves no purpose at all. I don't have permission, even as a CEO of an organization, to vary outside, mission, vision, strategy of the firm. That's not what I have permission to do. 

It's really important that all the stakeholders involved in setting the strategy of the firm do that. We must do that. When I speak to managing partners, when I go to partner retreats, and we talk about strategy, I go, “We can't have it if we don't have organizational strategy.” There's just a lack of clarity there. Alex and I, we could then just do what we want to do, because we could say, “It doesn't really matter what we know, because the organization is not telling me no, nor is the organization telling me yes.” So we must know firm strategy. 

Then, of course, within the context of firms these days, particularly as you get to, let's say the top 250 or 300 firms, there's usually a sub business element there. Let's say a service line or an industry that you're involved in. If we know firm strategy or organizational strategy, then I better know my department or my service line strategy that supports that. Then in that, thirdly, is my individual alignment with those two strategies. How does my highest and best use fit into what the firm and my department and or practice area has said are important elements for the year? 

I now have this opportunity to dream and think and say, “What is it that I should be doing that aligns best with that?” I have this opportunity then within that corporate structure to go to whomever may be my upward boss, whatever word that you may want to call it, and go in and say, “Alex, it's goal setting time. It's that time of year. I've looked at what you're doing with the firm, or you're doing with our department, here's what I think I should be doing.” That process, of course, is a very iterative process. Alex may look at that and say, “Gary, you did a really good job on these four. A couple of these, I don't think really fit well with wherever we’re trying to go and by the way, I think you have some skill sets to do some things that you didn't put on your list.” 

It's not me coming in and decreeing what my goals are, and saying, “Thank you, hold me accountable.” It's really this process of saying, strategy at the firm level, organization level, strategy department level and now I'm going to my leader saying, “Here's what I propose, what do you think?” Then we have this collaborative process. At the end of that, I have clarity, you have now responsibility from an accountability standpoint around what it means to make sure that I'm on target for those goals. If I'm not on target, what does that mean? The whole connectivity or cascading of that firm, department, to me with leaders, creates a situation where everyone has the opportunity to be successful. 

[00:26:11] AD: I like that, I like breaking it down that way. Let's just talk a hypothetical through of big strategy down to what I'll call group wide strategy, whether that be practice group, or industry, and then down to individual. How would that play out? If you have any, maybe can we come up with an example on the fly here around technology, something where were you – like how would that strategy line? How would it get down to me as an individual? 

[00:26:33] GT: Yeah. So the great example is the firm is dealing with a capacity issue. We're going to go back to something we talked about earlier, and that's on everyone's mind, dealing with capacity issues. We say, as a strategy, we have to figure out under all the many elements that capacity, how do we better use technology in our tax process areas to create efficiencies, and to make up for what we don't have in terms of people and hours? Alex is the leader of the tax area. Alex is now charged to use technology within tech structure. He comes to Gary and says, “We gotta figure this out. We gotta figure out how do we do this.” 

Using strategy and curiosity that we talked about earlier, you say to me, “Gary, one of the goals is, we need to figure out how to be more efficient in our tax processes. How can we use technology to make that happen? I need you to explore and make recommendations, evaluate, etc. etc. how we can integrate technology into it. By the way, part of this is dreaming, but then part of its reality, don't go out and tell me we need to invest a million dollars in something where we only have 10,000.” I'll say that tongue in cheek just for the extreme example. That's that cascading of firm says, “We create capacity by using technology in tax. It needs to be a priority.” 

Alex, as our tax leader says, “Yeah, you're right, we need to evaluate. Gary, one of your goals, because you have an aptitude for technology in the next 60 days, bring some solutions back to us.” So that's the cascading of that. 

[00:28:00] AD: Then the discipline, let's walk through where the discipline supports that and creates that space for curiosity. 

[00:28:06] GT: Yes. Let's say two things. The discipline creates curiosity and discipline creates entrepreneurialism. Both, they can go hand and glove in. Here's why. I can't remember if it was Cornell or Yale, but it was not Harvard, it was one of the other Ivies. They came out with an article that said, some of the most entrepreneurial organizations are the ones that have had the highest degree of accountability. I actually got it, as soon as I read the articles, light bulbs went off, because if you sit down with me and we agree that, “Gary, here's your project, here's the parameters of your project, go.” Well guess what? I now know that as long as I stay within those parameters, I can be curious. I can be entrepreneurial. I can explore. 

If I don't have those boundaries, guess what? Every time I come up with a new idea, I feel like I have to go back to Alex and get his permission. So where the discipline is, if we set goals, set parameters, have timeframes, and Alex hands those to me and we mutually agree to those, you've now let me go. You've let me go out and use that curiosity to explore. I now know my limits. I don't have to be looking over my shoulder all the time about whether I am or not doing the right thing. By the way, at the end of the day, we may or may not agree on the solutions that I propose, but at least you've given me freedom to be exploratory, curious as an entrepreneur. I think that that article was a real awakening for me, because I we think of accountability as being constrictive or restrictive and in fact, it can be the other way around. 

[00:29:34] AD: I want to get on my soapbox for a minute here. I want to talk about one of my favorite books, Extreme Ownership by Jocko Willink and Leif Babin. It’s Navy SEALs, it's their time in Afghanistan and Iraq, but it's 12 lessons for leadership. If you haven't listened or read it, it's an excellent book, and it's all presented from a military type fashion, you can sense the discipline in the writing of the book and the individuals that are stored throughout it. 

The final lesson, the final message is discipline brings freedom. This is something that I had read shortly before I officially took my jump as an entrepreneur. I've re-read the book a handful of times since then. It's really stuck with me, because being an entrepreneur now and going to – I know, many people listening might work within an organization. Again, I think many professionals have an entrepreneurial side and I would argue that most humans I know, most individuals I know, a really important element of their life is autonomy, and self-agency, and being in control of one's destiny. Getting their freedom requires the discipline. 

In speaking today, and Gary, you can speak from this in your own experience. Actually being in that seat, actually being in the driver's seat requires an immense amount of responsibility and a lot of maturity and personal discipline to be successful in doing it. That's all accountability, it's personal accountability, right? That's really what drives and creates that ability to function in that world of true freedom.

[00:31:05] GT: It is. We often see the fruits of entrepreneurialism, and don't really realize the discipline that it took to get there, and what people did give up in order to do this. Did they have personal freedom from day one? Of course, they had some level of personal freedom and that's to be admired and excited about, but what it took to really succeed, required discipline beyond measure and focus beyond measure. A little bit like we talked about earlier, that takes different types for people, but it's a grind, right? Having started a CPA firm, then having now started a consulting practice, it's just not walking in the front door and saying, “Here I am, let's go.” There's a discipline to it. 

[00:31:44] ANNOUNCER: This is Branch Out, bringing you candid conversations with leading middle-market professionals.

[00:31:51] AD: Let's tie this all back around creativity. Creativity is really important, whether we're speaking about it from an individual entrepreneur, an individual working in a firm, or a leader trying to run an organization, the need to be creative in your approach and innovative in your thinking. We talked about a lot of technology in the beginning, and I think innovation and creativity is technology, oftentimes, implementing it is where it comes into play, right? How do you suggest to someone to really embrace and create a day-to-day approach to maximize the creativity within appropriate bounds to still execute where necessary?

[00:32:31] GT: We have, a couple of times a day, we’ve already mentioned books that we've read, and things that stimulate our thoughts and what we do. I mean, learning is a big part of that, right? Exploring and having intentionality around learning, listening to Branch Out podcast, Googling things, studying, trying to figure out what's going on. Back to their curiosity, where curiosity fuels that creativity, and really trying to figure out, “What do I need to learn? What are the elements?” By the way, this is why within the organization, getting individuals focused on where they probably play best is important, right? Because now they can focus that creativity and curiosity around a particular area. Something as standard in a firm is an audit methodology. Recreating an audit methodology, boy, that doesn’t sound exciting to a lot of people. But  if you're really good at that, that's what we need you to do, right? Let's start exploring. 

Again, imagine three years ago telling someone we could do an audit without absorbing inventory. Most of our people are more technical in nature, and they go, “Well, the standard don't allow it.” Well, the creative people said, “How do we figure out a way of doing these things differently?” Someone sitting in a room said, “I'm really good at audit methodology. How can I get creative, tax, consulting, all the way down?” That creativity is supported by the curiosity that we talked about earlier, but it is also very, very focused. 

I probably would have spent my entire life in college if I was a wealthy person. I would have gone from being an accountant to being a doctor to being whatever the next list is of things. So that just means I'm the type of person that you better narrow it down some, or else I'm just going to start chasing the next curious thing. That structure is required in creativity. Doesn't that sound the opposite of what we usually think about creativity? By the way, that doesn't mean we're stifling your ability to think out of the box. What we're really doing is we're disciplining, back to your word from earlier. We're disciplining our ability to be creative in that space.

[00:34:32] AD: Well, let's dive into that. That stifling, a little bit. I see that at times, where my previous roles have been stifled at times, and creativity. Sometimes the stifling is needed, because you're trying to create that box and put someone and I don't mean stifle it down to nothing, but you have to rein it in at times, right, especially if you're working with someone that's a big thinker like I tend to be. You have to put someone in a box to make sure that it's appropriate. How do you advise a leader, anyone who is leading people or managing around this to create the right environment to ensure that they're putting the right parameters in, but not restrictive to the point where the other person's like, “Well, if you know how you want it done, why don't you just tell me?” 

[00:35:11] GT: Yeah. You'll know this. The older the leader, the harder it is sometimes to let that happen, because the space between what we knew and what's going on gets broader and broader every day, as technology adapts. First of all, what you hope is you have a leader who herself or himself is creative enough to understand how important exploration is. So we hope that we have that. The second thing is, we have to have, as leaders, the ability not to punish people for honest mistakes. I do believe that we oftentimes, in allowing creativity, especially in the CPA world, tend to set financial parameters and we set them fairly constrictively, or unreasonable in our timeframe expectation around those things and when they don't occur, we're the first to go pull the plug. 

Now, look, I could give you plenty of examples on the other side, where we fall in love with an investment that we make, and we never pull the plug fast enough. Don't get me wrong, it goes both ways, but in the context of this conversation around creativity, we have to be reasonable in what we expect of people. We have to allow for mistakes. We have to allow for people to, I’m using the old term, spitball. We got to allow them to spit the ball a little bit. We have to allow them to put some things up there that make us scratch our heads, without reacting to those things, which is typically what happens.

If we hear about them, and we huff, we puff, we turn our attention to our cell phones and what we've just said was, “That's crazy, I'm not listening anymore.” While we have not necessarily said no to them, that spirit of creativity and energy has gone away, because of our reaction to it. We do those things that you talked about from the leader standpoint, not only with setting the goals, setting parameters, giving freedom, but also in the way that we react, in the way that we listen to exploration. We may use the word judge, critique, whatever words you may want to use, even our small reactions to those things, says a lot to the people who are creative, about whether we do or don't embrace it. 

[00:37:06] AD: That goes, if you're in that position of leadership, you yourself should embrace creativity and recognize, again, think back to any major change you've ever championed and how long through that journey did you feel like, “What in the heck are we doing? Is this ever going to happen? Is this ever going to get there?” Then it just comes together, right? That's how things tend to happen. They seem really challenging and then they just start to happen. The reality is, it's because it takes time. At least in my experience, I think we as humans tend to be relatively bad at actually having a good memory and judging time that's elapsed. 

If anyone can remember back to COVID, when it first hit, and it felt like every day was a month, and then all of a sudden, the first summer, the second summer came and it felt a month was a minute, right? Time is very hard at times to really judge what's happening and how much we're really getting done. That's I do think, again, a whole nother topic for another day, but that's why there's merit to having a plan, writing goals down, tracking what you're doing, have an understanding of what you're accomplishing and what you're moving forward on a day-to-day, week-to-week, month-to-month, quarter-to-quarter basis, because that understanding of that is what keeps you going. You'll get there. It's more about that process of really embracing it.

I want to make one comment on the finance element of it, because I think you’re – It rang a thought in my mind. If we go back to our corporate finance classes, for anyone who's studied in the realm or worked in the realm of finance, you have a term called sunk costs, which are those investments that have already been made that you have absolutely no ability to recoup. Therefore they are not part of the investment analysis. They cannot be part of the analysis. You wipe it out of your mind like it didn’t even happened. 

I think far too often, decisions to move forward on technology investments, it’s a broad macro term, but decisions to move forward on innovative things have to do with the emotions that are stuck around. “We just spent 100 grand on it, it didn't work,” and getting hooked up on that, instead of saying, “Well, yeah. We did, but look what we learned out of it. Now that we know, what we do now. It's only going to cost 50 more to get where we're trying to go. Let go.” Right?

[00:39:11] GT: Yes. You know, I had a CPA firm that invested about 150 grand in conference room technology with cameras and the ability to have web conferences and stuff in December of 2019. Well, by March 2020, we weren't doing that, right? We're largely not, we’re using these things. We're using our laptops. I remember when the firm was evaluating what to do about remote work and hybrid work and investing in Zoom or Teams or whatever, the CEO had that presence of saying, “Hey, look what happened December 19, is of no value to us. We have a great conference room with video conferencing and stuff like that. We may never use them again.” Everyone looked at him like, “You're crazy. We're going to be using those in two months.”

I will put money on the fact that there's three or four of those conference rooms that have never used video conferencing, but that didn't hold them back from saying, “We have to do this next thing.” That was driven, because they are a very values-oriented firm that says, “We're going to take care of our people and if taking care of our people means letting them work at home using video technology, then so be it.” But yet, you're right, sunk cost, especially in the CPA profession can get in the way pretty quickly. We don't want to be casual about that, right? We don't want to just keep making really bad decisions. We do want to learn, but we can't keep it from making good decisions. 

[00:40:34] AD: Well, we somehow stumbled into the theme of technologies in keeping on that. I've got our business and a lot of what I've spent the last three years of my life dedicated to and developing what I'll consider a custom application, if you will. Again, what is technology? It's really, there's a lot of things that, a lot of systems get tied together, right? Think about in your day-to-day, how many different systems do you have? What you're really trying to do is figure out how to time together and improve efficiencies and create automations, things that make your life easier. All of that work and maybe a really easy example is a CRM. If anyone's ever used a CRM, a robust, well developed, well thought out and implemented CRM can drive immense, immense value in your revenue generation activities. 

It can be a very big task to put in and take years of work and a ton of investment before you start to see and yield any results out of it, right? Any technology, you have to spend money, time and energy trying to use it and you might get a little ways into using it and be like, “Oh, this isn't the right technology. We gotta abandon ship and start over.” All of that's wasted. That's okay, because you learned in that process. If you're not willing to go through that, you're going to have a really hard time being continually innovative. 

[00:41:50] GT: Yup. You're spot on. By the way, I think in the CPA firms, particularly in the tax area, we will try everything once and it can become very frustrating. Again, if we're doing it for a strategic reason, then failure is okay. I mean, it's okay to recognize that it's not going to happen every time the way we want it to. The best laid plans of mice and men, right? I mean, we can do all the planning, we can do the research, we can have calls with customers, we can do all types of stuff. It's just not right. So, okay, we move on, or something's accelerated past that, that's even better. All right, let's move on. 

[00:42:27] AD: I think all of that comes back to what you'd said earlier, having a written plan. knowing what you're trying to accomplish makes that ability to be curious even easier. 

[00:42:36] GT: That plan has to include space for curiosity and space for things that may never actually have a direct ROI, whether it's technology exploration, or whatever it may be. We have to say, “This 50 grand, this 10 grand, this 100, grand, whatever the number is, you know what, if we never get $1 ROI, that's okay, because we're doing this for this reason,” whatever it may be. We have a habit of wanting direct ROI on everything and sometimes we just don't get it. 

[00:43:06] AD: Life doesn't work that way. 

[00:43:07] GT: Absolutely.

[00:43:08] AD: The ability to truly correlate your outcomes with your direct actions is very challenging, on a day-to-day basis. 

[00:43:14] GT: I would say to you that employee engagement scores, employee retention, customer retention, and customer satisfaction are ROIs, as well. The fact that we would be willing to explore some of those things, even if they don't work out, sends messages that benefit us as an organization. So when we're busy doing our calculations around direct ROI, let's not forget the indirect, which sometimes has value beyond what any of us could even think about measuring. 

[00:43:39] AD: Well said. Well said. Well, Gary, I appreciate this conversation today. I think we covered some really good ground there on curiosity, and the technology element was unplanned, but I think that was great. 

[00:43:48] GT: Well, I appreciate it, Alex. It was good to have the conversation. Hopefully we didn't go down too many rabbit holes, but it was great to explore all of them. 

[00:43:55] AD: No, it was a great conversation today. For our listeners, how can they get in touch with you, Gary? 

[00:44:00] GT: My website is www.thomsonconsulting.com. Thomson is without a P, so if you're looking for Thomson Consulting with a P, I’m not the guest. So thomsonconsulting.com, we welcome the opportunity, if anyone wants to connect. 

[00:44:13] AD: Awesome, we'll make sure that's linked in the show notes below. Again, Gary, appreciate you coming on here today. 

[00:44:18] GT: Thanks, Alex. Appreciate it.

[OUTRO]

[00:44:21] ANNOUNCER: Thank you for tuning in this week. Share this podcast with your professional network to help others connect, grow and excel. Like what you hear? Leave us a review and don't forget to subscribe now.

[END]