When was the last time you had a pop quiz? How well-prepared were you for this?
At this time last year, Todd Herman Associates (THA) had just turned 10,957 days – 30 years – old! Re-reading last year's article, one quote really stuck out – "Startups Are Easy, Stayups Are Hard"
Last Year – Startups Are Easy, Stayups Are Hard
THA became a three decade stayup because of the learning, growth, and trial-and-error I'd gone through during that time.
Over the years, I had developed and refined a formula that works for THA:
- The relative amounts of time I would devote to client work, business development, practice management, and all other tasks.
- The relation between business development activities and obtaining results – whether new clients, or new projects at existing clients.
- A reasonable cost structure.
- A performance plan with relevant goals.
Little did I know what awaited in just over six months, when I would find out how hard things could get.
This Year – The Mother of All Pop Quizzes
In late January, we all began to hear about COVID-19 – however, it really didn't "get real" until around mid-March, when the first national call went out to Americans to avoid social gatherings of more than 10 people. That's when clients started calling or e-mailing about the need to trim projects or put them on hold until the economic impact of COVID-19 became clearer. That's certainly reasonable and understandable, and I would have done the same thing were I in their shoes.
That's also the time when my formula, honed over 30 years, broke down.
- My rules of thumb for time allotments were turned upside down, as I spent most of my time looking for cost savings within THA and ensuring the firm had adequate sources of capital.
- My best business development activities – meeting for coffee or lunch with referral sources, working at client locations, dropping off doughnuts to clients and prospects, and attending various business events – all evaporated.
- Suddenly, my cost structure didn't look as reasonable as I'd thought.
- I put formal quarterly performance plans and reviews for all THA employees (including me) on hold because all activities and goals had to be reexamined.
I never expected Mother Nature, in the form of the novel coronavirus, would throw me a pop quiz – actually, more like a surprise mid-term exam – halfway through my thirty-first year. Still, She did, and I had no choice but to start taking this "pop quiz" and begin answering all the questions She asked.
Working Hard to Find Answers
My pivot to "student sweating a pop quiz" took several forms:
- My Business Development Associate and I began attending webinars, primarily hosted by The Brooks Group and Oechsli to hear what these companies – both focused on business development techniques – were seeing and recommending.
- One takeaway from both sets of webinars – the rules have changed, so you need to experiment with new marketing and selling methods, see what works, and experiment some more.
- I researched and implemented new technologies that helped reduce our cost structure and provided new capabilities beneficial to us, our clients, and others.
- I eliminated our Accounting Intern position, and divvied up the tasks between my Business Development Associate and myself. As part of this, she and I took a close look at three main tasks – the daily accounting procedures, monthly billing process, and monthly financial review process – and successfully streamlined and simplified all of them, quickly recovering the time we invested.
- I also reviewed some of our recurring expenses and changed providers for email security, payroll processing, and email campaigns, saving over $190 per month.
Even with all this going on, I still had to keep client projects moving forward, resulting in many long workweeks.
Some Things Stay the Same
Even though many activities did require new approaches and new technologies, numerous things remained the same:
- Treating employees well over the years builds loyalty, which kept my core staff intact – and you can't put a price on that.
- People still want to do business with people they know, like, and trust, and we made sure to keep those three words top of mind in developing new marketing techniques.
- Focusing on the value of our work to clients is just as important as ever – even more so, as they seek ways to get the most from limited capital.
- Working hard, never giving up, looking out for others, and keeping a positive mental attitude never go out of style!
Relationships, value, and values will always matter in business – especially in companies whose success is based on reputation and integrity.
Wildly Different Business Impacts
Over the past few months, I stayed in touch with clients and referral sources, finding a wide variety of COVID-19 effects:
- A company serving home builders had an outstanding second quarter, and things are looking bullish for the third quarter.
- A company supplying numerous essential businesses just completed it second best fiscal year on record.
- A company where 95% of revenue came from in-person training had to quickly pivot to other methods of serving their clients.
- A company whose top line is tied to logistics and hospitality surrounding major sporting events had virtually no business for 3 months.
- Some of the best and most successful sales professionals I know have almost nothing in their pipelines because they have seen their proven business development efforts come to a standstill.
The coronavirus not only affects individuals differently – its economic shocks rippled across industries, producing wildly different impacts.
Where THA Landed
After roughly 5 months of adapting to the "new normal," several things have begun to take shape:
- New rules of thumb for time allotments are coming into focus.
- We have added or enhanced several business development activities, including creating and posting a short video every month on social media, taking part in two web panel discussions, and more actively engaging with connections on LinkedIn.
- We have restructured our web site to better showcase the numerous ways we have helped our clients in many industries.
- Our cost structure is now $1,500 a month less now than pre-COVID, which has greatly helped with cash flow.
- My informal performance plan now has only a single goal – Guide THA through the COVID-19 recession. Everything else is subsumed to that overall goal.
Of course, things could change again. If they do, I'll adapt to a "new new" normal.
Once Again, We're All Students
As has been reinforced over the past few months:
- My ability to solve a wide range of problems – both business and technical – are what got THA to our thirty-first anniversary on August 1, and they are what will get THA through this.
- My willingness and ability to seek out different ways of doing business and assessing their effectiveness has also been a constant throughout THA's existence.
I believe we should all think of ourselves as students, regardless of how much education you have or how many certifications you hold. Lifelong learning, whether through a structured curriculum or through "on the job" challenges, is essential for continued success.
Let me close with a story from my Advanced Accounting class, taught by Professor Delmer P. Hylton, at Wake Forest University. For our first test, all the accounting students gathered in a large, auditorium-style classroom at 7:00 pm. The test Professor Hylton passed out had only two problems on it, and we could spend up to two hours on them.
The first problem was familiar, while the second one looked like nothing I'd seen in class or during homework – nonetheless, I did the best I could on the second problem. Just before I handed in my papers to Professor Hylton, I copied off the homework assignments he'd written on the board. When I got back to my dorm room, I began on the assigned readings – and discovered the second problem came from the NEXT chapter, the one just assigned!
Why did Professor Hylton include a problem we'd never seen before? Because he wanted to see how well we could reason our way through unfamiliar territory.
Will This Be On The Test?
To students of all ages, including those who might someday encounter a future "Todd Herman, Professor of Practice in Accounting Information Systems" – it could be pointless asking "Will this be on the test?" Why? Because you never know whether your professor – or even Mother Nature – might pull a Professor Hylton, requiring you to dig deep and do your best to solve unfamiliar problems.
Todd L. Herman