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Starting the conversation:
It is important to understand the fundamentals of accounting in order to be able to make good business decisions. This includes having an outside set of eyes that are honed from the manner in which technology is changing the way CPAs work. Dave Hartley, Partner in Charge at Anders CPA, talks about the commitment it takes to bring 30 years of experience forward while navigating change to help clients stay competitive in their markets.
Data is necessary to know where you’ve been so you can make the most informed decisions possible. That means collecting data — the right data — and using it to optimize evaluation of several good ideas. Risk is always a part of good ideas, and the cost of debt today doesn’t have to make things harder or unreachable … it just requires understanding how taking on such risk will help you today.
In this program, you will hear exciting developments about how technology will create more opportunities for understanding better what it will take to achieve your growth goals; that the ways we think can be expanded by committing to take the time needed; and how to change with the world as it changes around you. Jess Dewell talks with Dave Hartley, Partner in Charge at Anders CPA, about why it is BOLD to be innovative while surrounded by quickly changing marketing conditions.
Host: Jess Dewell
Guest: Dave Hartley
What You Will Hear:
The importance of understanding accounting.
Dave talks about the pace of change over the last 30 years and what he thinks will be happening in the next 30 years.
For accounting, the same fundamental skill set will be used, yet complexity and speed will be faster.
The need for an outside set of eyes to look at data and have thoughtful discussions.
How to use data points to make good decisions. (And, what data points to use.)
The real cost of debt, and its role to grow. Today’s use of debt has useful clues pre-2008.
Knowing what to take action on can be daunting, numbers can help you focus.
Anders CPA defines success as the best innovation and tech available to succeed in the accounting function and advisory roles. Dave recognizes how cool it is to have his own definition of success supported by the company he works for.
Strategic growth comprises the many things that you choose to make decisions around that utilize your company’s uniqueness and ability to stay relevant over time.
True advisory services want to build with clients.
Capitalize on the data you are already collecting (in addition to making sure you are focused on collecting the right data for your company).
It is easy to get distracted — which results in forgetting to think.
Deep work time is necessary to be strategic about the path you’ve chosen to grow.
It takes time to create new habits, especially if there is something to unlearn first.
Technology will change the CPA industry in the future.
Change is filled with experiments that result in successes and failures. Your mindset matters.
Risk is OK, and good advisory services will help you to understand what the risk is so you can think through how to work with it.
It is BOLD to be innovative because of quickly changing market conditions.
Get started and make a difference in your business with a Growth Framework Reset.
Resources
Transcript
Dave Hartley 00:00
If we say we’re going to do something, we’re going to sail over and then we’re going to burn the boats, we are not going back we will make this work. So that focus and commitment. I think that’s a key part of business success today.
ANNOUNCER 00:14
You are listening to the Bold Business Podcast, where you will hear firsthand experiences about what it really takes to ensure market relevance and your company’s future.
Jess Dewell 00:25
I am so excited today to have Dave Hartley. He is the partner in charge of advisory at Anders CPAs and advisors. He believes that the future of the CPA profession looks different than its path. What, how can I get more excited about a conversation than talking about growth and innovation? Dave is now focused on spearheading innovation efforts at Andrews CPA and advisors where they are going to continue to grow and change. He’s a lifelong technologist. He’s a recognized innovator, he is a successful business executive. And that means when you combine that with his current goal, and the fact that he expects and it sounds almost even demands change in his realm, to continue to be of service to the world as we evolve. Hack. I can’t say any more about it. I gotta just say Hi, Dave. Welcome. Thanks,
Dave Hartley 01:19
Jess, I appreciate it’s great to be here. It is an exciting time. There’s a lot of cool things happening. So I’m excited to share that with your audience.
Jess Dewell 01:26
I want to do a quick shout-out for your podcasts. Dave, what are the ones that we’re going to be that people can go on the lookout for right?
Dave Hartley 01:34
The firm that I’m with is Andr CPAs and Advisors. So it’s a top 100 CPA firm. So the podcast that I host is called but who’s counting? And so we just finished season two. So you can go to Andrew cpa.com and slash podcast actually, and you’ll get to the podcast. In addition to that our virtual CFO practice produces a number of podcasts as well, I was just a guest on The Young CPA Success Show where I had fun with a David Letterman top 10 style list for that podcast. So that’s a good one if you haven’t checked out that one. But I share all this stuff on LinkedIn. If you want to connect with me on LinkedIn, that’s where you’ll see my thoughts on AI and cybersecurity and growth and just a lot of different things.
Jess Dewell 02:13
Here’s one of the things I love. Once on a podcast. Once listening to podcasts, we’re always looking for the next awesome thing to add to our repertoire kind of like book readers, which I am also one and have more books and more books unread than I would like. But definitely they do are dwarfed in comparison to the amount of books that I’ve actually read.
Dave Hartley 02:33
I have the aspirational list as well, I have this stack of books that I would like to get to, but I just don’t have enough time in the days. And I do think Leaders are readers. And there’s a lot to be said for that there’s a lot of great ideas that you can consume and pick up that other people have put down on paper or E-paper.
Jess Dewell 02:50
So let’s start right there. Because what are we doing, we’re tracking where our company actually is, from the work that we’ve actually done through our financials on paper or E-paper. What made you decide you wanted to get into this work?
Dave Hartley 03:01
So I actually started back in the day just as an accounting major. And I actually had a very wise friend of mine who said, Dave, you need to study accounting, you don’t have to be an accountant. But you need to understand accounting. And I think that’s one of the things that the CPA profession hasn’t done a good enough job talking about, which is, this is a foundational skill, understanding numbers understanding accounting, it’s the Language of Business. And from there, you can take that and go anywhere, we have so many CPAs who are successful CEOs, entrepreneurs, leaders of companies, but the root was they understood how a business works, what financials are, what’s important, what levers do you pull, how do you monitor KPIs, all those things and then took those things in when a lot of different directions. That’s actually how I started. So I did public accounting for a while. And then I pivoted to technology. And I went hard into technology kind of left the CPA world behind. I LED technology for a public company for a while. And that was a great experience. I left there and I came back to the CPA world. And so now what I do is I kind of merge the CPA world and the technology world together and try to bring those skill sets to Anders and my team so that we can continue to grow the firm and ultimately be a catalyst for the success of our clients.
Jess Dewell 04:16
I have roots in technology as well, going back to the day, as they say, free, a pre subscription way back to the tribe before you buy days, which also you do too good when it comes to how do we use technology. But then how do we integrate it into our world at work? And I remember the first companies that I was in the 90s we were still using spreadsheets more than tools and other things. And here’s what I want to say now I know spreadsheets are a big deal and they still are I still use spreadsheets so no knock on that. But to what has been built on top of them since then. You said something before we got to this space that I really thought was interesting. You said it and tell me if I’m wrong because then we’ll build on whatever the right one is right? What I heard you say was having been in this industry this long, I have been through so many ups and downs of markets.
Dave Hartley 05:16
Correct. And I remember it pre-technology days, I can go back older school than even you in terms of I remember prodigy 2600 baud modems. In college, I worked for IBM and I sold 386 SX computers, which were super sexy at the time, they were, I had one of my variants that, that was late 80s, early 90s, my first professional job, I was an auditor. And literally for every job I carried around a Macintosh that was two feet tall in a giant bag with another giant bag that had the printer in it. And when you wanted to do an update it, literally you’d press the button, and it would take four minutes to do whatever the computation was. So I’ve seen the world from that point of view, all the way through way free internet, I remember when I didn’t have an email address all the way through today. And when I look over that period, it is astounding the pace of change that has occurred during that timeframe. And I think the scary thing, or the absolutely wonderful thing is that when you look at that pace over the last 30 years, and now you think about what’s going to happen in the next 30 years, I think the change in the next 30 years is going to be even greater than the incredible amount of change we’ve gone through in the last 30 years.
Jess Dewell 06:27
Before we get into what might be coming because that’s actually ultimately where I would like to go. I want to acknowledge just what we’re doing with our CPA work, what we’re doing with our numbers, what we’re understanding from our financial thing that we have, in this moment, I’m calling it a thing, because it might be slightly different in the way that we’re using it company to company, but it’s a static look at what has already happened. And in a static Look, that’s already happened, I’m gonna actually then go back to our experience. And yes, you do predate me, I’ve always had an email address. Once I got into college, I’m like, Oh, my gosh, there was a time before.
Dave Hartley 07:04
Now I am that old, I remember when I did not have an email address. I’m not sure if I’m proud of that or not.
Jess Dewell 07:08
But this is how fast things change how fast things change. And so like my world goes back as far as 2001. And then after that was 2008. And then after that was 2016. And then after that is what they’re potentially predicting. And so we’re going to just stick with what we know in the past because it’s happened. And there were more than that. But in my world, these are regardless of company. These are the things that a business had to face major change from outside economic sources. They were also the function of, in my opinion, some innovation in different ways. And so from your point of view, on the finance side, I would ask you this is the way that a company navigated, whatever the big ones, were I listed my three, you might have three others, or others that you would want to share, do you navigate the static places to actually used those finances? Has that changed over that period of time? Or are you still using that the same way to navigate whatever comes different Annecy each time.
Dave Hartley 08:10
So I guess I would say it’s the same fundamental skill set. However, I think what has changed is the speed and severity of which the change comes. And corresponding that with that would be now you have much better tools to help you understand and assess what is happening. But the core bedrock of it all has to be that, that financial understanding. And a lot of business owners where we see a lot of challenges, our business owners just do what they do. And so if your background is sales, if your background is that you’re an engineer, that’s your passion. And that what you, that’s what you do, and you go really hard. And then you wake up a year later and go, Oh, crap, I guess I need to look at the financial statements. And then you look at the financial statements, and you’re like, I didn’t achieve at all what I thought I was achieving this year, I thought I had a great year. But you look at the financial statements, and it’s not represented. That’s where you need somebody with that financial acumen that can guide you along the way. And actually take those things, instead of it being a discrete into the year, here’s your financial statement. It’s got to be living, it’s got to be breathing, you have to be looking at data and making adjustments as you go. And if you’re naturally not inclined to be a financial person, part of what drives success, I think is the people around you. You need your team, you need somebody if financial if finances is not your thing, you need to have somebody on your team, that’s their thing. And that can be either an internal employee, it can be a virtual CFO can be a lot of different solutions. But at the end of the day, having that understanding and having that point of view is critical. Because otherwise you’re gonna do a lot of stuff and you’ll be really busy. But at the end of the day, whatever you define as success, if you don’t have that and then are marking a path towards that destination, you’re gonna get lost along the way.
Jess Dewell 09:55
I’m gonna reflect back to you because I’m very curious about this. The fundamentals are the same and it’s Because of the three that I mentioned, in the past, all had different catalysts and actually impacted different industries. And so from the strategy side, from the growth management side, from that side of things, I saw it all, and how, and I know how much it depended on each industry and who was showing up in that to know what those financials, what that accounting, what that snapshot was, is in that moment, to be able to make The Next Best decision that might be too broad of a generalization. And you might be like, just, you’re totally missing the boat. And I would be okay with that day because I’m here to learn as much as the next person who is listening in as well. If I listen to somebody in a whole other industry tell me that they are facing this craziness, I’m going to start to worry. And if my behind-the-scenes, my fundamentals are not there, for me to check, I’m going to be doubly worried. And by having this information, we’re able to remove the worry and go, Oh, yeah, that’s real. Okay, I should be worried or remove the worry in the sense of, oh, okay, I am enough in a different industry, what we’re facing is different, what my situation is, is enough different. I’m so glad to have that. So I don’t hit that in the future.
Dave Hartley 11:15
Yeah. And I think understate as data points, both within your world but then picking up those external data points, because you got to remember, as fast as things have changed, there were so many people that for we lived in a zero interest rate period, where basically, there was no cost of capital. We’ve seen this in the last couple of years, when people have, suddenly they’re awake now, and they’re like, Whoa, I now have a cost of capital, I’ve never had to deal with that before, that’s going to influence my thinking on how I make some of these decisions. But if you’ve never lived in that world, or if you’ve never experienced 2008 2009, some of the ups and downs, I go all the way back to the.com. Crash, there are things like that that experience tells you. And part of what I think as we start to bridge into technology is that the technology can help us identify and correlate those dots, especially as we go forward. But once again, you have to be paying attention, you have to care. And you have to be looking at those sources and trying to put those things together.
ANNOUNCER 12:11
If you are ready to make a real impact in your business, and you’ve waited too long to take action, go to Redirection.com. And click on solutions to find out how.
Jess Dewell 12:23
He said something I’ve never actually thought about it that way. Because I go back pre-2008 also 2000 one.com, crash all of that, that it of course debt has a value, even though it was my little, little, it never left my, it never left my awareness. And I’m listening to you. And I’m thinking, Oh, look at that I had an accidental helper, but and also a blind spot to recognize there are companies out there that have never experienced needing to that that was expensive, and the way they have built their business. And the decisions that they are making fundamentally may have to change. Now,
Dave Hartley 12:59
There’s a lot of examples will take Silicon Valley Bank, which is that some people from the outside, were looking at that and saying, This is going to be really bad. And should the regulators have jumped in and all that kind of that’s a whole other podcast episode. But at the end of the day, there was risk there. But because whether they weren’t paying attention, or they didn’t understand or whatever, and that’s just one example. But that happens a lot, where you have people that remember if it’s not your thing, if financials are not your thing, and if you’ve never gone through some of these business cycles, there are things that you are not aware of, because you’ve never experienced it, that you need to make sure you’ve got people around you who can help you spot those things, whether you’re playing pickleball in the people that pickleball you’re visiting with him and or your church, and you’re hearing from different people that being a sponge of that information, and then figuring out out of all of those clues, what’s relevant for my world? And then what should I take action on? And I think that’s part of what that when you think about what makes people successful? How can you see what’s next? How can you see around the corner? And a lot of it is the clues are there, all of us see the same clues, but only certain of us really understand those clues, and then take action on those clues. And I think a lot of that is what drives business success. We at Anders we’re growing our practice because we believe when we look at the future, the CPA profession and what our clients want from us, it is different than today. And so what we’re trying to do is to get there faster, because we know and believe that’s what our clients want. So we’re trying to evolve and change just like other business owners try to make their businesses better to meet the needs of their customers. That’s what we’re trying to do as well.
Jess Dewell 14:36
So how do you define success?
Dave Hartley 14:38
So we’ve got our vision and mission statement. So ultimately, at the end of the day, our goal is to serve as a catalyst for those striving to achieve their highest potential. And that’s two things one is our clients, whatever our client’s definition of success, we want to help them achieve that. But the other piece is we’ve got over 400 employees spread all across the country. We want all of those employees We’ve our team members to achieve whatever their definition of success is, is as well. So it’s for us, it’s that kind of guides us. But at the end of the day, success means something different for everybody. And part of what we’re trying to be is enable that understand the needs of our clients so that we can help them achieve that success. And then for our people have the mechanisms and processes in place, and the flexibility because there’s a lot of people that come into the CPA profession, and they start doing tax work or audit work or whatever. And then they decide, I like public accounting, but I want to do a different discipline within public accounting, to have the portability across the firm for you started in valuation work. And now you want to go do audits. And we’re fostering that ability to move horizontally across the firm, because that’s what our people want. They want the flexibility to be able to do that. And in the CPA world, it’s really a talent game right now, we want the best people on our team, because they generate the best outcomes for our clients. And in order to do that, you got to have the best environment, you got to have the best technology. And you genuinely have to care about the experience that your employees are having.
Jess Dewell 16:07
Do you have a goal? Do you have an expectation? Do you have something that you’re building from, for the amount of time somebody’s wagon is hitched to yours?
Dave Hartley 16:15
So we go through a strategic planning exercise, where every year we’re revisiting our goals. So I joined I’ve actually been in the profession a long time, but I just joined Anders less than five years ago. And so as part of that, when I came in, and the firm basically is embracing the future is really these advisory services that are adding value to our clients. And in everything we do our audit and tax work, we’re advisors, we’re adding value wherever we go. But as we look at that, trying to look at and really define what is reasonable in terms of growth. So we do have a goal, we’ve put it out there, we know what we’re going towards. But at the end of the day, just back to your point, it is we want to make ourselves so attractive that both our clients, our team members, and especially what we’re focusing on now is we have areas in our advisory practice that our clients need that we don’t have. So we’re looking to attract boutique firms and people with specific skill sets that can bring those to Anders. And in order for us to attract those folks. We need to create an environment that’s attractive, where they look, man, especially these smaller firms with less than 3040 people, they’re dealing with HR headaches, they don’t want to do their own financials, they can’t get a good marketing person. And then they look at Anders is oh my goodness, you guys are a top 100 CPA firm, you’ve got 1000s of clients already, they’re ready to buy my service. And if I joined forces with handers, boy, that would make my life better. And it’s a need for Anders because we don’t have that skill set. And if somebody brings that to us, it’s great for them. So at the end of the day, the way that we try to structure and grow through m&a is by creating mutual success. At the end of the day, we never want to do a deal. We want people to come to Anders and build businesses with us. So we will partner and share success as part of that journey. If somebody wants to sell us their business, and they’re out. We’re not really that interested in that. Because we have limited time limited capital limited resources, and we want to direct those at the highest and best use. And that’s what firms are people that want to help us build and achieve our mission.
Jess Dewell 18:23
How many people are in your company, Dave?
Dave Hartley 18:25
We’re north of 400 people now. Where are you geographically? So we’re headquartered in St. Louis. But we have employees all across the country.
Jess Dewell 18:35
And you do a strategic plan every year?
Dave Hartley 18:37
Yes. And we do multiple checkpoints during the year. And then in 2023, we’ve actually done a deeper dive to really challenge all the fundamentals about the firm. And then we can go into more regular updates and cadence when it’s more about execution. But this is the year that we’ve really focused on really challenging the future and what that looks like.
Jess Dewell 18:56
And then with that everybody’s involved in some level on that annual piece. And everybody’s involved, for sure in the cadence.
Dave Hartley 19:03
Yeah, we try to get all of our team members to understand where we’re headed, why we’re heading there. What is the definition of success? How are we going to make it there and make sure that they’re part of that journey? And if they feel that they’re connected and engaged and they understand what we’re doing, then they’re going to provide better service to their clients, their clients will be more successful. And at the end of the day, we’ll all get to where we want to get.
Jess Dewell 19:24
This is awesome. And I had you highlight those specifically because as we’re moving toward, where it’s going and how it’s going to change, knowing changes fast, being rooted in something strong, being rooted in understanding what we as an organization wants, is necessary to look forward. Otherwise, we’re really strong at looking backwards. We can make great decisions about this moment, which always means short-term, forward-looking notice. And so to be able to look further forward, the more solid the word covenant, the more aware we are where we are in the company, and what our goals are and how and who we’re helping, supporting, aligning with developing, and who’s got which torch to hold as we’re moving through our path is incredibly important. And I think that becomes what I’ve seen over my tenure, having done what I do for such a long time, is that without that, with everything that you just stated, and you were able to rattle those off, you knew it right away. I’m just thinking, Oh, this is so great. Because there’s there, it’s easy to know, are we close to the path? are we way far off the path? are we exactly on the path, which means being able to look forward, and being able to help other people look forward? is an incredible gift that is missing. And that is what I’m hearing you say is? So now we’re talking about CPAs stuff that typically we’re looking in the past. But what does that allow us to look to the future, it’s more than just saving, it’s more than just not expending capital, it’s A, B, C, D, E, F, G, and anything else we can imagine, that gets to be part of the conversation, Dave, with you and the advisors that you’re bringing to the table. So let’s talk about that. How has technology allowed this looking forward longer than 6090 12 months, 6090 days to 12 months ahead? We look way farther than that with much more confidence today,
Dave Hartley 21:23
We’ve gotten really good with data. And I was actually having another conversation where we were going back to 2015. And even what’s changed within 2015. If you go back to 2015, all the rage was business intelligence, and trying to get your data organized and getting it structured. And I think we did it. And now as you get to the 2019, 2020, then all of these tools started coming to the market, of how you could actually capitalize on that data, whether that’s through visualizations, whether that’s through models, whether that’s through a lot of new and different things, that really we didn’t have the capability to do before. So now I think the technology has caused us to be able to do things that maybe before you could do that, but it was a time-consuming task. So I’ll do it every quarter or once a year. And now you’ve got because it’s now enabled with technology, you can almost do it continuously. And you’ve always got those KPIs and data points that you didn’t have before. And now the other piece is that with technology, a lot of those things that used to take his time, we don’t have to do it anymore, or that time has been dramatically shortened. Because we now we have better tools to do it with as a result of that that has freed up time for in theory for us to be able to think more. Because I think that’s one of the things, there’s great things with technology. And there’s bad things with technology. One of the things with technology is we are constantly distracted. And the depth of thought today is really hard. And sometimes even me, I’m aware of it, I’m trying to be more aware of it. But there’ll be times well, two weeks will go by and I’ll suddenly wake up and I’ll be like Holy smokes, I’ve just been a machine the last two weeks just executing. And I haven’t really thought in any amount of time. And we have all these distractions. So not only do we have the tools that we use at work, but then you got social media, you have constant interaction, all these tools are great, but the every notification every 20 seconds, there’s no possible way you can give deep thought and actually solve difficult problems if you are distracted every 20 minutes. So I’m a huge focus guy, I’m a huge burden the boats guy that you’ve got to get focused. And if we say we’re going to do something, we’re going to sail over and then we’re going to burn the boats, we’re not going back, we will make this work. So that focus and can commitment. I think that’s a key part of business success today.
ANNOUNCER 23:37
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Jess Dewell 24:11
You and me were I we’re talking about this and I’m listening to you list those off and I’m thinking oh, I forgot I had that. And I’m like yes, I know, because it’s hard and every new piece of technology that I add to computer or add to a tablet or add to my phone all of a sudden I have to remember where do I go turn the things off? Because to your point it is easy to be distracted and what you are describing there is that’s just interruption that’s not even distraction at that point that’s to have focus it’s a skill that I almost believe is becoming a lost art and do so do you take okay we’re gonna stay right here. Or maybe it’s a left her but do you stay and commit? Do you carve out time to be focused and say this is I am protecting this time just to be safe Houston do deep work?
Dave Hartley 25:01
I do, but I don’t. I gotta know this, how do you do and don’t like all of us, I have great intentions. And it’s like all block time on my calendar. And, and actually Friday is my favorite day of the week and not because we’re heading to the weekend because Friday is the day I can actually get things done. And I have that time to do deep thought, Monday through Thursday for me, I am pretty much in meetings nonstop every day, probably a lot of your listeners will say, Yep, that’s me too. And then a lot of people and I have this, other people have this, it’s 430 In the afternoon, and you sit down and you go, Ah, now I can start my day. And the whole day is lost in the whirlwind of just getting stuff done. And so that’s what I try to protect my Friday’s to where I can actually do deep thought and I can do tasks that require a couple of hours of intense thought because otherwise, I’m lucky to get a half hour or 20 minutes during the week to where I can actually really give some deep thought to something as much as I try to map it out and protect it. And we’ve got some people in the firm that do time blocking different techniques that they use, really manage their calendars well. And that’s wonderful, I do an okay job at it. But at the end of the day, I try to find those spots where I can actually do that deep thought because I think our job as leaders, our teams are going to work hard, they’re going to do their thing, they’re gonna, they’re gonna march along, and they’re going to do stuff. But at the end of the day, if we as leaders don’t have think of it in terms of they’re going to climb the ladder. But if we as leaders don’t have the ladders, on the right walls, they’re going to just climb, climb, but at the end of the day, they’re not climbing to the right outcome or whatever we define collectively as success.
Jess Dewell 26:35
I appreciate that it’s a Friday for me. That’s interesting, because for me, it’s Mondays, I carve out Mondays. And when I started doing this, it was only two hours. And what I found was I didn’t do anything for those two hours for 12 weeks, because I’m like, How do I use two hours? What’s this actually need? And once I got through this place of that, and I quit feeling guilty about the fact that I wasn’t doing anything there during those two hours. I, my reflection was I actually was I was figuring out, how do I turn it all off. And that takes time, as does any good habit. What I wished it was half the time. But it took me a lot of time to go, okay, the only two hours that I’m going to protect, I want to make sure I’m using well. And it took me a long time to be able to get to a place where I could switch quickly into that time. Because I noticed that around that 12 mark out about halfway through, I was ready. And I had a whole hour to to do deep work to think about a big problem. To understand what direction do I want to go to understand what problem is my team facing that? They need some help, and I haven’t had a chance to think about it. And I’m going to help them solve the problem. But it may not be the best solution because we it actually hasn’t been thought about in terms of are we just climbing to climb to your point? Or are we climbing in the direction we want to go it to get to the destination that we want. And so you There is definitely that commitment. Can there’s learning even if we don’t think we’re learning, and I’m curious for you in your career journey. Have you looking back experienced that also where it seemed like nothing was happening? Or the wrong things happening? Or it never went the way you thought it was supposed to go? And all of a sudden, there was this point? Oh, I do have all the skills I have. And I can just jump right in. I was an overnight success at this.
Dave Hartley 28:31
When I came to Anders. So this was about five years ago. And if you were listening at the start of the episode, I walked through my history, how I started as a CPA then went to technology and then came back to the CPA world. And when I look at when I got to 100 and there were some great things along the way. There were some very unpleasant things along the way. There were job situations that didn’t work out. There was a great company that I was with that market conditions turned on us and we had to do bankruptcy and, and then also I was at Arthur Andersen. And so Arthur Andersen was a major big eight CPA firm that had a negative event. And suddenly this incredible thing wasn’t there anymore. And it’s like all of those things happen. At some times, they were great. Other times it was the lowest of lows. But now after a couple of decades, when I came to Anders, I realized I could point to every stop along the way. And every stop. I learned something from that which I use in my world today. And it’s if I wouldn’t have when I first started at Ernst and Young and I was doing audits. I was doing health care audits, and I was auditing hospitals. Now at Anders we have a healthcare practice. And so I know and understand the healthcare practice, when I pivoted out of CPA went to technology. Well at Anders, we have a technology subsidiary that provides those types of services to small to mid-sized companies. So I’m relevant there. We have an audit department. In early in my career, I did audits, so all of those skills and then also from a risk management perspective, since I lived through Arthur Andersen and I lived through a bankruptcy, my antennae are up when it comes to risk. I’m constantly assessing and looking for risks. And I’m trying to highlight and bring things in making sure that we’re managing. And I’m not opposed to risk. But I want to make sure that we take smart levels of risk, and that we understand what we’re getting into. And I tell this to my kids all the time, my kids are now of the age where they’re getting their first jobs and during high school and things they’re doing, and I’m like, Hey, and I’m like, how was it not like, oh, that place was terrible. I left after three months. And I’m like, Okay, but what did you learn, you learn something from everything. And if you’re not, then you’re not ultimately going to be as successful as you could, because you’re not learning along the way, my kids will come to me. And they’re like, oh, man, I learned that I hate dealing with the public, or I hate doing the same thing every day, or I hate an environment that’s that structured or unstructured. And it’s okay, great. That is now another thing. And similar to your point of how you had to learn how to spend those two hours, same thing, you should be constantly learning from all of these things, so that your next thing is even better, I don’t believe that we can lose until you stop. Because you should be constantly improving constantly learning constantly getting better. And as long as you’re doing that, and not giving up. Ultimately, at the end of the day, you’re gonna get to a better outcome.
Jess Dewell 31:20
And we can’t give up because continuing to look forward, there will be changed, there will be disruption, there is going to be unfortunate events that some of us find ourselves in different ways over the years that we then have to show up deal with in the moment. And the more experience we have, the more we’ve recognized our successes, the more we know what we’ve learned from that will help us either bounce higher when it’s done, or be able to just stand up and get through it, or be able to even stand up and get other people out with us to do what we need to do. And there’s all kinds of other things I could say, in some sort of a range there. So knowing that this is going to happen, right? We’re going to have more tech, it’s going to be in technology, it’s going to be the way things work. It’s going to be all kinds of awesomeness. And in the end it is awesomeness because it could be awesomely horrible. And it could be awesomely awesome. We’ll just call it awesomeness. How do you see technology changing the game for you and your industry, because I think in this particular scenario with our particular audience, I think that’s going to be more interesting, because everybody needs that outside set of eyes, in this particular instance, for anything in our business, and to help us through different things.
Dave Hartley 32:35
So if you’re not familiar with the CPA business, it’s basically a mentorship profession, historically, where basically people come into the profession, and the people that are in the profession, basically teach people that are new to the profession, how to do your job, what are the things to do, and then they progress and grow through the ranks. So you have a lot of CPAs, who have been at the same firm forever because they started as an intern, and then they became a staff, and then they became a senior, and they just moved up through the ranks. And that’s great. But the challenge is, okay, now what happens when AI comes in? And a lot of the things that those people in their first, second and third years learn on suddenly can be done with AI? And so how many tax returns? does somebody need to perform to really master tax returns? Is it 40? Is it 400? Is it 4000, probably whatever the number is, today, it’s, you’re not going to need to do that many, because a lot of times you’re doing repetitive things where you’re not adding as much value as you could, because you’re learning and you’re just figuring out how to do all these things. Now, if AI is tabled, able to take a lot of those things. And if they get automated via technology, then suddenly where does the pipeline go? Because these this is how people learn? How are people going to learn in the future? How do we make sure if they didn’t learn the basics in those first few years of their career? How do we know that later on their quality will be what it needs to be, and their insights will be deep. There’s a lot of fundamental changes that are happening. Another thing another trend that, that we’re looking at right now is also the CPA worlds have always been a pyramid. And now what it’s becoming is more of a diamond, where you don’t need as many people coming in to do the lower level work. And then you start looking at that and challenging that. And it’s a completely different structure for a firm. The other thing is part of that shift is the generally the model I described as you gain experience, by the time you’ve been around for 30 years, you’re the master, you’re the guru. And now I’ve I’m now at the point where basically that’s me, what I’m finding is what’s changed is that now we have people that come to us with no experience or one to two years of experience, how they solve problems, the tools that they use, the way that they go about things is very different than I do it and in many ways their way is superior and I’ll do something I know exactly what to do because I’ve done this for 30 years and then I’ll the same problem will be presented to somebody that when I was in school, we learned that you do this and there’s this tool that will do all that stuff and they use a different tool set. And they get a much better outcome faster than I would if I did it my way. And so there’s this interesting power shift that’s happening where suddenly the power is not just isolated at the top of the CPA profession. But the people that know this, that know the tools that are open to change. And Ken which, by the way, I’ll transition into this, basically, there is, in my opinion, the firm’s and the companies that ultimately will win are the firm’s and the companies that help their people understand and learn how to change, there’s going to be so many new tools, so many new technologies that are coming, how do you identify them? How do you integrate them into your business processes in what you do on a daily basis, but at the end of the day, we are humans. And we can only take so much change. And we can only learn so many things, if you can optimize your workforce, to be creative, excited about that change, excited about the new tools, at the end of the day, that will become a significant competitive advantage for you. And that’s one of the things that we’re trying to do at Anders is to figure out how can we do that, identify these technologies, bake them in, because at the end of the day, the other thing is, that’s going to be the employer of choice. If you have great employees, and they look around and say, Man, I hear that company or that firm over there, they’re doing all these cool things. I want to go over there, because they’re the ones that are taking the risk and experimenting and being progressive and trying to move forward. So we’re going to use that eventually as a competitive lever, because it will be a better place for people to work because we’ve created that environment.
Jess Dewell 36:35
If I were to say this, what would your response be? Innovation, as we know it today is going to become daily change and challenge.
Dave Hartley 36:42
I would agree with that. Every week now I get summaries of all the new product releases of software companies that are now baking AI into their products. And for me what’s happening with Chet GPT over the last year, which is crazy, it’s only been around publicly for a year. But you take that and you just look at that degree of change within that one year, then you start taking those capabilities and actually start baking them into the business applications that you use every day. That’s where we take this next leap forward in terms of productivity. And I love debating that. How much more productive will we be? Is it 2%? Is it 10%? Is it 50%? That’s a great discussion to have. But I think Jess, it makes your point that this change is coming. And you’ve got to prepare for it, you’ve got to set the foundation so that your organization can build on it and embrace it, as opposed to being resistant to.
ANNOUNCER 37:36
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Jess Dewell 37:53
It shifts it goes from one to 2% or this or that in terms of productive and it comes to how tall the build building did we just scale because we had this time and the space with which to work on this problem, or this idea. And it changes the playing field from 2d to 3d, basically. And I’m fascinated by how this can change in that first part of the program. We were talking about having these fundamentals and how do we have these fundamentals, we can still get them, we can still instill them, the way that happens, we’ll change the way the experience to validate them will change. They are still necessary. And so just because they’re necessary doesn’t mean it is the way that it is and the way we’ve always done it for the last 30 years, or whatever it is.
Dave Hartley 38:39
I’m active in the Missouri Society of CPAs things that we talk about is that AI oftentimes solves problems that people didn’t even know that they have. Yeah, our frame of references. That’s just what I do. There’s this problem, I’ve solved it before I will go solve it again, the same way that I’ve solved it in the past is Did you know that you could do that and 80% less time with a better outcome if you did it this way. And that for a lot of people, they’re just going to keep doing things and solving problems the same way they’ve always solved them, when they don’t even realize that there’s a much better way. I think our risk as individuals and organizations is to make sure that we’re over here, looking for those things and doing it better, as opposed to just focusing strictly on execution and getting things done. Because at the end of the day, that may be great in the short term, but long term, you’re not going to be competitive.
Jess Dewell 39:29
What kind of mindset is necessary to be able to get these results, get these things done, and stay creative, to innovative along the way.
Dave Hartley 39:40
You have to be open and willing to change. And you also have to be willing to experiment and fail. And that’s really hard because we as humans don’t like that it feels very uncomfortable. But at the end of the day, you have to recognize that if I’m going to try 10 new things. The first time I try it, I’m going to be terrible at it, and then ultimately out of that 10 Not all of them are going to work, and some of them are going to fail. And that that concept of being able to have acceptable risks or acceptable failures is hard for a lot of business people. And that’s one of the things at this time with these things that are coming, you may bet on a tool that ultimately doesn’t end up being the winning tool. But the ability to make decisions quickly, to evaluate to pick up those data points, and to take advantage of the speed and optimization, that technology can bring us. All of those things can get you to a better place. And
Jess Dewell 40:30
I actually think there’s a culture shift that’s needed. And yes, as humans, I don’t think we like to fail. I also think we’re in a society that actually accidentally likes it when it’s accidental, and doesn’t like the work that goes in and we’re starting to see this shift, I feel personally, we’re still far away from it, we want the unicorns, what we don’t realize is before those unicorns came along, and I’m talking about technology, unicorns here, there were iteration after iteration that did not get funded, that did not have that, that did not have that. And I end that if we could embrace the all the did-nots along the way, we would realize we’re actually better at it than we think we just happened to recognize a reward, the unicorn.
Dave Hartley 41:09
AI will never be as bad as it is today. Tomorrow, it will be better the day after that it will be better the day after that it will be better. And the other thing is that as these improvements happens, it becomes exponential. Because certain improvements, when lumped together, suddenly you start to accelerate, and you start getting this hockey stick, which I think we’re going to start seeing over the next couple of years. But it was interesting to your point. So yesterday at Anders so in you mentioned culture, so we are attempting to move and evolve our culture forward. So yesterday, we hosted our first-ever Innovation Summit. And we brought in three outside speakers through a program with a basically in an incubator-type program that we’ve worked with for a decade, we brought in three speakers not from the accounting world, there were their sports technology, people that run venture capital funds, and a person that want to runs a human works division at a very major governmental organization, very non CPA type stuff. But what we’re trying to do is we’re trying to embed and get people to think differently about some of the same problems that we solve every day. So that from a cultural standpoint, we’re trying to make sure and let our people know that we want to foster experimentation, we want to foster risk-taking. And we’ll do this together. And it won’t always work. But at the end of the day, we’ll move forward. So one of the things that came out of that innovation summit was the to your point about unicorns, we were talking about one of the speakers made a point of we have a ton of overnight successes that have taken eight to 13 years to get to that point of being an overnight success. So there, you’re right, there are a ton of failures, a ton of things along the way that you learn. And ultimately, you have to persist, and it may take eight to 13 years. But suddenly, at that point, you’re a genius, because you’ve got this idea, but nobody knows you’ve been working on this for eight to 13 years. And I think that’s part of also there, there is a this all builds on itself. And if you’re not experimenting, and not learning. So for example, just one of the things that drives me crazy. I’m a big LinkedIn guy. But one of the things that drives me crazy is now I can spot from a mile away. People that write content, which at GPT. Oh, I know, because it’s so consistent, the format is the same. And if you don’t customize it and make it your own and add your own insights and creativity, it is very boilerplate. So it sounds like you, you’ve seen that as well. But how did you know that just the only way you know that is because you’ve played with it, you’ve seen it, you’ve produced things. And now you can spot that in somebody else’s work. That’s part of the maturity curve that all of us have to go through with technology. And if you’re not experimenting, if you’re not trying stuff that you don’t know how to do, that is over here. And it’s weird, but I’m going to try it if you’re not doing that, you won’t be able to spot these trends, you won’t know the thing, you won’t see these data points that others see because you’re not experimenting, and trying the technology.
Jess Dewell 44:04
In my present retreat, you know that two hours, it’s now all of Monday, it’s six hours, and then I have two hours to do stuff with the stuff I generated, okay, into the rest of the world. I actually have and do make a point to use AI based tools to prompt to see have I broken through to the deeper level yet. And that is an interesting way that I’m trying to do that for myself in that protected time. Because now I can go out and I can test it in the real world. Now I can go out, it’s one of the things I’m doing is, are we asking the right questions? Are we asking the deepest questions? Are we asking the ones that are going to poke the bear the quickest? Because we will find out if it’s friendly or not until we actually know maybe we could just pin it instead? We don’t know. But we have to find the question. Right. And I think that’s a huge piece. So I have actually done that, in addition to using it in other parts of our business but for me personally, that’s a because some days I feel really good and I feel really thoughtful but I actually haven’t really broken the surface As, and I have to pull that back for myself, I really have to hold up that mirror. And that’s an element of everything. When we’re talking about change, when we’re talking about technology, when we’re talking about how we want to grow, where do we want to go staying competitive, and being innovative.
Dave Hartley 45:15
And that’s one way that I use Chet GPT, which is I will do something. And then when I’m done, I’m like, oh, yeah, there’s this amazing tool out there. I’m gonna put it in chat GPT and see, what did I forget? What did I miss? And I’ll create a prompt to ask it to review this, what are the themes that are missing those types of things? And the more specific that you can be in asking it, you’ll get better outcomes. But then yeah, it’s a lot of times, it’ll come back and I, and when people ask, so what is AI in my mind, it’s you’ve got five or six interns, that you can basically give a task to and say, hey, I’m interested in this, go research this for a couple hours and bring it back. At the end of the day, it’s not going to be great, but it’ll be Dilek. directionally accurate. Your job is to say, that’s good. But you forgot this, you forgot about that. So consider this, consider that same thing I do with my work, when I’m done writing something, I’ll put it in and have it react to it, it’s wow, I never even thought of that. There’s this whole other level, that it’s highlighting for me that now I can pursue because man, I missed that. And I think that’s part of our thinking process of how we can get deeper. And a lot of times you only get to that point, as we talked about earlier, if you’re dedicating that time to get that deeper level of focus, where you can actually handle and grapple with some of these things. So that you can wrap your head around what actually is the problem as opposed to just the activity of what it is that we’re all doing and get sucked up in the day to day world with?
Jess Dewell 46:38
What makes it bold, what makes it bold to be innovative, and change quickly,
Dave Hartley 46:42
You have to be willing to take risks, then CPA side of it comes out and says we don’t want everybody just out there taking risks, we want them to understand the risks that they’re taking. And if you’re truly going to be bold, then you should be doing some things that other people are not doing. Because you are going to take some risks, if you’re going to differentiate if you’re going to do something differently, that is taking a risk from the way that the rest of the herd is going after and attacking this problem. So by being bold, you’re actually going out and you’re looking at all of those options. And all of your competitors may go down path A and you’re now saying path D is actually the what I need to go down. And that’s the one I’m going to do to do that you have to be bold and it takes guts. But when you do that you have to recognize if path D is not the right path. What is the impact of that? Am I done? Is it game over if I choose Path D and it’s not path D? That’s one of the things you have to make sure. And a lot of times the only way because we’re constantly distracted. You have to actually sit down and give that a lot of thought before you make those types of decisions, which is incredibly hard in our day-to-day distracted world.
ANNOUNCER 47:54
Jess hosts the Bold Business Podcast to provide insights for building a resilient, profitable business. By deeply understanding your growth strategy, ensuring market relevance and your company’s future. It is bold to deeply understand your growth strategy with your host Jess Dewell. Get more information about how to drive solutions and reset your growth mindset at Reddirection.com. Thank you for joining us and special thanks to our post-production team at The Scott Treatment