25 Lessons from 25 Years in Business
Read 25 timeless lessons based on Todd's 25 years in business.
On August 1, 1989, I began what is now Todd Herman Associates (THA) – and I was more than a little unsure of my decision to go out on my own at 4:00 am that morning.
Obviously, I got through that initial panic, and here we are – at THA's silver anniversary!
What a great time to look back over a quarter of a century, so please join me in reviewing some stats and thoughts from twenty-five years.
Quantitative – THA By The Numbers ...
We began using a dedicated time and billing program on July 1, 1992 – prior to that, time was entered on client-specific Excel worksheets. Thus, with both information from our time system and some estimates by me, here are a few statistics for THA:
Client Service Hours: 145,300
Number of Personnel: 95
Over 25 years, a lot of people have been part of our team – and these statistics could not have been achieved without strong efforts from everyone associated with THA!
Qualitative – THA By The Lessons Learned ...
Of course, numbers don't tell the whole story. There are MANY stories I could tell, yet space does not permit even a small sampling of these. So, let me share a number of lessons I've learned over the years.
One note – Before I went out on my own, I thought my accounting degree and auditing experience qualified me to run a business. WRONG!! I learned more in the first 2 years being on my own than ALL my time in college and with Arthur Andersen combined. Thus, these lessons were learned in the most grueling MBA program of all – The School of Real Life and Hard Knocks!
1. People Are Our Most Valuable Asset – This statement is true regardless ofbusiness or industry. We view business results (represented by ROI) coming from the alignment of People, Process, and Technology, all supporting the company's
Strategy. The funny thing is ... I've never seen Process, Technology, and Strategy create themselves, implement themselves, or monitor and revise themselves.People do those tasks. 'Nuff said.
2. Information Is Our Second Most Valuable Asset – Over 25 years, we've come up with a LOT of great ideas and a LOT of great projects for our clients and ourselves! We've also developed the processes and technologies to capture, store, and retrieve that information.
• We have mail files, document libraries, Office documents (Excel, Word, Visio, Publisher, Project, Access, SQL Server, web log files, nearly 2,000 books and articles in our internal library, transaction ledgers, and hard-copy working papers covering all types of projects. We can search across all the electronic information in a couple of seconds, so if we need to recall how we addressed a client situation 10 years ago, or locate the source of an idea, odds are good we can quickly do so.
3. Hire for Aptitude and Attitude, Not Necessarily for Track Record – I believe one of our core competencies is finding "Diamonds in the Rough" – people who are underutilized in their current jobs, and who can and want to do something more challenging and more fulfilling. How can you find such people? It's hard –there are clues in the person's resume, hobbies, words and posture during an initial meeting and subsequent interview, poise in answering tough questions, timeliness of completing requested assignments, and professionalism of follow-up. I'm looking for passion, curiosity, confidence, intelligence, communication skills, and client service orientation.
4. People Bring Their Personal Lives Into the Workplace – A saying I like is, "I want to hire the behaviors, yet I end up getting the whole person." Illness, injuries, issues at home, lack of sleep, needs of kids, and just general "bad days" all end up coming to work with Our Most Valuable Assets. This is unavoidable, so the best I can do is attempt to manage these things, and keep them from spilling over to clients or co-workers.
• Confession – I'm guilty of these things, too, and my staff have learned to manage me.
5. I Can Only Change Me – Many times over my life, I've felt I could conquer most anything or bend a situation to my will. Let's be honest – we all have felt this way at one time or another. Yet, over time, we have all seen how little control we have over events affecting, say, our livelihoods – how it is impossible to swim upstream against inevitable changes, such as downsizing, restructuring, outsourcing, offshoring, and acquisition or closing of one's employer. It was early 2009 when I finally found the words to summarize this – "I Can Only Change Me," which is a section in the outstanding (and easy to read) book, QBQ! The Question Behind the Question, by John Miller. Five simple words, one incredibly powerful concept!
6. People Can Only Change Themselves – I cannot want someone to change more than that person wants to change. For an employee, the most I can do is provide the carrot or the stick to entice that person to change, usually through a Performance Plan or a File Memo. After that, it's up to that person – choose to change and begin to do so, or not. The choices the employee makes determine the choices I make.
7. Change is Essential – In any business, and especially in a technology-based business, change is essential to meet client needs, a soft economy, staff expectations, and stockholder return. Over 25 years, the firm has had at least 6 significant changes, and is in the middle of yet another one now. My folks and I have successfully reinvented the firm and ourselves each time, and this time will be no different.
8. Change Stinks – Even though change – even to the point of wholesale re-invention – is essential, it's never easy, and it's always messy. People, Process, and Technology are all disrupted and re-configured. Fortunately, most of our people accepted the inevitability of change and got with the program – and those who didn't have moved on.
9. 3PO Advice and Feedback Is Essential – As the owner of a small business without an independent Board of Directors, I'm inherently trapped in my own echo chamber – and this has frequently led to me convincing myself something is black, when it is actually white. We all have blind spots. For most people, their bosses see and address their blind spots. But what if you're your own boss? Who will see and address your blind spots? That's why I've had various types of accountability relationships since 2004. When I sit down with someone who will tell me the truth, and I actually listen to their observations and recommendations, I've found I perform better – if I don't listen, then I don't perform as well. Over the years, other people in the firm have benefitted from such "third party objective" – which we've nicknamed "3PO" – advice and feedback.
10. Performance Plans, Metrics, and Reviews Are Essential – Ever since I've had employees, we've had performance reviews in various forms. Yet, are they essential? I would say, "Yes, they're essential – provided they're done effectively." In hindsight, we've only been doing performance reviews effectively for the last 5 years, ever since we overhauled our process to include specific plans and metrics. We needed performance plans and target metrics to give people goals to aim for, and provide a basis for balanced, timely, focused, and specific feedback during the quarterly performance reviews. I've always liked the quote by Ken Blanchard, "Feedback is the breakfast of champions." An excellent book on the techniques and value of giving good feedback is Formula 2+2, by Douglas B. Allen and Dwight B. Allen.
11. Hard Work Is Essential – Behind every one of these 25 "lessons learned" is a lot of hard work. Having your own business is hard work. Working for a boss who largely gives you autonomy over how and when you get your work done requires hard work. Staying in business 25 years is impossible without hard work. End of lesson.
12. Grit and Perseverance Are Essential – Over 25 years, I can't count the number of times I've been so frustrated, I just wanted to throw in the towel – yet, I obviously have not. Why? Because I know things will always get better. At first, I didn't REALLY know this – still, after going through several difficult periods, things HAVE always gotten better. Should I be a "realist" instead of an "optimist"? I don't think so – my optimism powers the grit and perseverance I need to get through tough times. After all, you never know when you'll – literally – be just Three Feet From Gold.
13. Doing the Right Things – And Enough of Them – Are Essential – During the summer of 2006, I read Lead Generation for the Complex Sale, by Brian Carroll, a book which caused me to overhaul our entire marketing approach, including our message, the content and organization of our web site, and our marketing and networking activities. Here's the book's premise in a nutshell – Whenever you have a "complex sale," you have to create a "surround sound" effect so prospects will hear and see your message in many different places. Thus, we began doing a wider variety of activities, and tracking these. Have we determined how many of these is "enough"? No, and we likely never will, since the inherent difficulty of a complex sale makes it nearly impossible to track cause and effect, or to find correlations. We do as many right things as we can, and then play the odds.
14. "Luck" Is Essential – During a dry spell, one of my accountability partners told me, "Todd, you're doing all the right things – now all you need is some luck." There are many different terms for "luck" – serendipity, providence, good fortune, and divine coincidence, among others. While I acknowledge a certain randomness as "luck" in winning a new client, I also believe this nugget from Samuel Goldwyn – "The harder I work, the luckier I get." For example, I attended an event I almost blew off at the last minute because it had been a long week and the weather was yucky. Nonetheless, I attended and ran into a friend who had been the CEO of two past clients. We chatted and he said, "Todd, I've got a problem at my new company – it's similar to one you've solved for me before. I'll know more in 2 weeks." Sure enough, a few weeks later, I got a call to setup a meeting – and quickly landed a new client! Was this "luck" – or was this an unusually quick harvest of some newly planted seeds? The speed of the harvest – yes, that was luck. The planting of the seeds? Hard work, grit, and perseverance.
15. Reframing Setbacks Is Essential – My teenage daughter, Morgan, helped me see the value in this lesson. I had just had a setback – a key staff member resigned unexpectedly – and she asked me about the last time someone had left. I thought for a moment and then I shared, "Morgan, at first, I thought I could never get anyone better than that person – yet, I quickly hired someone better!" She helped me reframe the resignation as an opportunity to find someone who better fit THA's current needs. The book Change the Way You See Everything contrasts Deficit-Based Thinking (DBT) with Asset-Based Thinking (ABT) – here are a few examples from page 17:
16. The Sun and The Rain Are Both Essential – During 25 years, I've had both good times and trying times. Overall, the good times have won out. Still, both sun and rain are required to yield a good crop.
17. Marketing is Fun! - When I hit my first dry spell many years ago, I learned the importance of Marketing and Selling. Of the two, Marketing is more fun! There is always something new to learn, ideas to develop, and things to try. I really like how one speaker described Marketing – "The purpose of Marketing is to shorten the Sales cycle." Wow – so true!
18. Selling is Hard – Asking Questions is Easy – At some point, Marketing ends, and then it's time to grind out some results through Selling. Thinking back to that first dry spell, I nearly panicked – after all, I was NOT like the sales reps who worked for my family's upholstered furniture business. Fortunately, I found and completed a great self-study course, "The I-Hate-Selling Course for CPAs." The key point – CPAs are great at asking questions, so conduct a "Sales Audit" by asking LOTS of questions to determine how well your services fit someone's needs. Asking questions – now THAT was something I could do!
19. Selling Isn't Telling – In a one hour meeting to discuss a potential project, if I talk more than 5 minutes about THA or myself, something is wrong – I need to be asking questions. Think about it – if you have a serious medical issue, do you want the doctor to tell you all about herself, or would you rather she asked you LOTS of questions so she could make a good diagnosis? I've met with many sales reps who practiced "Selling Is Telling" – and they've always left empty-handed.
20. Learning New Things Is Fun! – If I could have stayed in college forever, I would have – that's how much I love to learn! Doing what I do is the next best thing – I get to learn about new companies, industries, business challenges, and technologies. How great is that?
21. Helping Solve Problems Is Fun! – Part of being a student is digging in and writing papers, or mastering concepts and dominating that test – and boy, was I good at those things! Academic problems? Students solve those. Business problems? Consultants solve those. Solving problems for clients – that's what I live for, especially at the end, when the client's pain has gone away!
22. Helping Others Is Fun! – Whether it's teaching a staff member a new skill, or working to solve a client's problem, I'm helping others, and I really enjoy it!
23. "Steel Sharpens Steel" – I had heard this saying, yet never fully understood what it meant, until one of my staff and I had a particularly engaging discussion, where both of us freely challenged the assertions and assumptions of the other. At the end, we were drained, yet both acknowledged having a much clearer view on our next steps – and she said, "Todd, our dialog really proved ... Steel sharpens steel!" When folks come into THA, they're generally already quite good ---- and they will be made better because of the "steel" of the firm's culture. Ancient wisdom – in this case, from Proverbs 27:17 – still applies even today.
24. Find – or Create – a Job You Enjoy – I had a "real job" once – and I left it to start my own firm. To this day, I still don't view what I do as a "real job" because I have so much fun doing what I'm doing! Why? Two quotes from firm alumni explain this.
• "Todd, you've got the perfect job for your strengths!" – Indeed! My StrengthsFinder results are (in order): Achiever, Learner, Focus, Strategic, and Significance. Strengths like those require a job like mine.
• "Todd, you're the happiest entrepreneur I know!" – I get to use my strengths EVERY day! How many people can say that? No wonder I'm happy.
25. Sometimes, You Can Only Laugh At How Things Turn Out – Several times over 25 years, I thought I was jinxed – times when two or three or even more unpleasant surprises would hit me within a few days. On one of these occasions, I just had to laugh – I realized my work life seemed like an episode of The Office... only MORE absurd! So, when it seems like you're at wit's end, take a deep breath, let it out, and picture yourself as Steve Carrell! Once you've had a good laugh, reframe things this way – a bunch of uncontrollable events just ganged up on you, and now you're batting them away one at a time.
On Balance ...
Taking stock of 25 years, I realize I've made my share of mistakes – and, I also realize just getting to 25 years means the successes outweigh them!
Looking back, I have to say, "Wow – 25 years! Who'd have thunk?" Indeed, who would have imagined the ups and downs, the surprises both pleasant and otherwise – and the FUN of it all?
Making it to THA's silver anniversary was not a solitary feat – so I feel a deep sense of thankfulness and indebtedness to our current and former firm members, clients, business colleagues, referral sources, service providers, and trusted advisers. A special thanks go to my family and friends for accepting me as I am, even though they must occasionally think I'm crazy for doing what I do. Without all these folks, there'd be no THA.
Thankful. Indebted. Grateful. Humble. Appreciative. Amazed. That's how I feel at 25 years.