Dave Cain: Welcome to unsuitable on Rea Radio, the award-winning financial services and business advisory Podcast, that challenges your old school business practices and their traditional business suit culture. Our guests are industry professionals and experts, who will challenge you to think beyond the suit and tie, while offering you meaningful modern solutions to help enhance your company’s growth. I’m your host, Dave Cain.
Dave: Think about the last thing you did, even if it’s as simple as taking a drink, cleaning up your emails or remembering your passwords. Did you think about the steps that you took to get to your end goal, or did you just go through the motions without really thinking about it? More often than not, we just go through our day-to-day work, not really thinking about the steps we take to do simple tasks or how these simple tasks ultimately make up the major projects we complete as a team. And by the way, what happens when somebody on your team is sick or leaves the company? Will somebody be able to pick up the slack right away? Or will productivity slowdown and impact the bottom line? Just like that, those little involuntary steps become incredibly important, because they symbolize continuity and productivity.
Dave: Rea’s Retirement Plan Services team recently learned just how important processes are to their team, and to Rea and associates, and most importantly to their valued clients. In fact, they took a lot of time going through their processes, and for their efforts, the team earned certification by the Center for Fiduciary Excellence as adhering to the American Society of Pension Professionals and Actuaries Standard of Practice for Retirement Plan service providers. So mouthful, but it’s really a big deal for these guys. In fact, there are only 48 CEFEX certified firms in the country, and only two are in the entire state of Ohio, and I’m happy to be part of a firm that is one of those two firms within the state of Ohio.
Dave: Brigette Lafferty, a manager on a Rea’s Retirement Plan Services Team was central to her team’s recent process documentation efforts. Today she’s here to talk with us about how process documentation can drive value across all businesses, regardless of industry, and what you can do to start your own process documented patient plan. Bridget, welcome to unsuitable.
Brigette Lafferty: Thank you, Dave.
Dave: Hey, before we get started, we gotta do a little intel on you, and you are situated in Rea’s Zanesville, Ohio office, but you travel throughout central Ohio and southeastern Ohio. Your specialty is retirement plan designs.
Brigette: Yes.
Dave: You guys do a great job, an incredible job in that area.
Brigette: Thank you.
Dave: We hear from clients all the time. Talk to me a little bit before we get into this. Retirement plans on the increase. You seen an increase in what’s going on out there?
Brigette: Yes, yes. Our Department alone has sold over 70 plans this year. We really are getting out there, and meeting, and greeting, and talking to people and really being able to help them assess their needs. We’re seeing a growth and cash balance plans. Which are pension type plans. So yeah, I really do see, there is an increase.
Dave: An increase.
Brigette: Absolutely.
Dave: You’d mentioned that cash balance plan and that’s something I to want to shout out to your team. Is, that’s a rather unique design that has to be structured accordingly to fit our clients needs.
Brigette: Yes. Yeah. Typically, cash balance plans are good for clients who are, around age 55, looking to retire in the next 10 years, have liquidable income that they’re able to put these dollars away. We just did a proposal for a client in Zanesville. She was 61. She is looking to retire in four years, and the bottom line that their company was able to put away $404,000 in contributions for the year. If they chose the cash balance.
Dave: Big Time savings.
Brigette: Yes.
Dave: Big Time planning opportunity.
Brigette: Absolutely.
Dave: So listeners, a checkout Brigette on our webpage and she can fill you in more. We’re not going to dive into cash balance plans. Maybe next time you’re a guest-
Brigette: Yeah. Absolutely.
Dave: … we’ll dissect one of those. Because those are a really neat, and you guys are doing some great things in that area. But congratulations on this certification.
Brigette: Thank you. It was a lot of work, but it definitely, I think just shows what Rea is about and what the pension department is about.
Dave: So how long did it take your team to receive the certification by the Center of Fiduciary Excellence?
Brigette: It was about a six month process, from beginning to end. There was a lot of documentation that we had to collect. It was about 13 pages of questions and items. It was HR, IT, Pension. Anybody that is in Rea that’s involved in processes and procedures, helped us gather all the information for the CEFEX certification.
Dave: Six months. So when your team meet, tell me a little bit, did you guys go out to happy hour after each meeting to kind of debrief on this whole process?
Brigette: No. No because-
Dave: No?
Brigette: No, because I’m in Zanesville and Paul’s in New Philly. So it was all on the phone or …
Dave: A printed email.
Brigette: … instant message or … yeah.
Dave: But a pretty heavy commitment to your time to get to this point.
Brigette: Yes. Yes.
Dave: So tell me a little bit about what it all involves, about a process documentation. It sounds like a lean process, that came over into the pension services.
Brigette: So, process documentation is a detailed description of how to carry out a process. It includes all types of documents like policies, checklist, tutorials, forums, screenshots, links, process maps. So when we started the CEFEX there are lots of questions about different processes and procedures, and how IT handles this and how HR handles this. So we had to go through all of Rea’s processes and procedures, and pull these individual items out, and attach them or send them to CEFEX for review, to make sure that what we’re doing goes along with their standards.
Dave: Did you throw out any processes? My golly, we got a few that need tossed out.
Brigette: No, we actually didn’t have any we threw out. But we actually did implement additional items on the pension side. So when they asked how many plans do you have with this number of participants, or what the assets are, we actually started putting those questions in our current procedures. So next year, when I go to pull that information, it’s easier to get. So we did actually add items, but we did not take away from.
Dave: Why should business owners care about process documentation? Let it flow, let it rip. It’s been going okay for 50 some years. I don’t need to change.
Brigette: Well, first of all, you can use it as a roadmap to quickly understand your company’s processes, and assist all your members of the organization understanding the processes, and knowing who to contact with problems. I think that’s very important. When you were in a larger company, you may not know who to contact when you have an issue. When you have this documented, you are able to figure out who you can go to, and they can help you with that process. It assists all your members in understanding the processes, and it preserves a knowledge even when those people who have the knowledge leaves the company.
Brigette: Which you’ll see, if someone’s been in a position for a long time, there’s always that knowledge up in their head, that other people may not know. But if you have it documented in a process, that knowledge has now been moved from inside their head to on that process. So it is easier to move on if someone leaves.
Dave: We talk a lot about on the podcast, about profitability, and efficiency and so on, One of the things, as I was reading your notes, that it also helps employees understand the roadmap, the process, so they’re not constantly hunting for data, hunting for information. It’s right there for them.
Brigette: Right.
Dave: So it can be, again, why business owners should care, it’s efficiency, which should lead to some profitability somewhere along the line.
Brigette: So, it’s one of the four things you could achieve if you do this process. First of all, it helps you improve processes, and identify bottlenecks and inefficiencies, and it helps train employees. And that’s what you were just hitting on. You can use these documents to help employees understand their job roles, and familiarize themselves with what they’ll be involved in. But you can also use it as a training tool for new employees. So they understand-
Dave: An on-boarding tool?
Brigette: Yes. So that they can understand what their role is, and what they’re doing. But it also will help employees who’ve been there a long time, just remember how the process works. So let’s say you haven’t done this for a long time, you can pull that procedure up and then you’re gonna be able to walk through it, so you remember how the steps are. You can also help train the new employees with these tools.
Dave: If there’s only two CEFEX certified firms in the state of Ohio, this must be a very difficult certification to obtain. Maybe not for everybody.
Brigette: Yes. Well, so Rea had no issues. I mean, the way they have everything set up was exactly what CEFEX was looking for. I mean honestly the HR, the IT, everything. They were very, very happy with the way Rea has put everything into processes and procedures. But it was a very grueling task. I mean just going to each person pulling down this, pulling down that. But it Rea did have it all set. So it was easier to work with a certification.
Brigette: Not only did we have to identify all these processes and procedures and give them these 13 pages of answers, they came onsite, and they met with all the different entities. They met with everybody in the pension. They talk to IT, they talked to HR. They had to review those processes and procedures. So having all those set and written, I think may also made it easier for those involved.
Dave: Boy, that sounds like a pretty significant expense. Glad it came out of your team’s budget, not mine.
Brigette: Well, I think that in the end it’s gonna pay for itself.
Dave: Sure, sure. As you go through certifications, everybody out there that sat through some, it’s a grind. It is, but at the end of the process were you happy? Did you feel pretty good about it? Sense of accomplishment?
Brigette: Oh, absolutely. Being one of the few in Ohio and then in the country, it really has set us apart. It shows that our pension department and Rea in general really do care about are our customers. That we are doing everything we can to make sure that we are practicing within a firm criteria, and that we are doing the industry’s best practices. So, I think it’s important when a perspective client or advisor looks and says, “Wow, they’re CEFEX certified. I know that they’re doing what’s right. I know that they’re looking out for their client’s needs, and making sure that they are following this international standard ISO IEC.” They’re going to feel good about coming to Rea.
Dave: Sure. So, as our listeners are business owners, they’re certainly investing in their business. And as they’re looking for an advisor, and especially we talked about the cash balance plan and what you guys do. The CFXE designation really something our listeners should take a look at, and ask if their providers have that.
Brigette: Yes.
Dave: Because not only, I suspect, it tells us that, we’re a heavy compliance firm, doing very well in the process. Great internal controls, correct processes, correct education and licensing. All of the above.
Brigette: Yes.
Dave: This isn’t go on the Internet, and find the best and the cheapest provider.
Brigette: Exactly. Exactly. All of the managers in the department are certified. And now our whole department, the pension segment is certified. It just shows that we really have that attention to detail, and that we are looking to make sure that we are doing everything to keep our clients compliant. We had to go through all of our processes with the CEFEX certification to show that we are looking out for our clients, and we are making sure that they are compliant. We had to review those processes with them, to show what we did to ensure that when their work goes out year end, that we are giving them our best foot forward.
Dave: You’d mentioned detail, and I guess I want an individual in a firm that is very detailed oriented if they’re looking at my 401k, and all the tough fiduciary responsibilities that go with that. I want to make sure that’s being done correctly.
Brigette: Absolutely.
Dave: And so you guys passed the test.
Brigette: We did.
Dave: Did you get a gold medal?
Brigette: Did Not.
Dave: What was your score? You get like a, A, B, C, D or are you just a pass/fail?
Brigette: Pass/fail, but I’m sure it was an A.
Dave: Sure it was an A?
Brigette: Absolutely.
Dave: Knowing your team on. I’m sure it was.
Brigette: Yes.
Dave: Let’s talk a little bit about the business benefits of process documentation. I think documenting is a process that’ll help a company achieve four key things.
Brigette: Yes.
Dave: Can you identify those?
Brigette: Yes. So it helps you improve your processes. It identifies those bottlenecks. It helps train employees, which we just talked about. It helps preserve company knowledge. And then the last one is, it helps mitigate risks and maintain operational consistency, consistency.
Dave: So those are the four. I want to hit on one. Bottlenecks, and every organization runs into a bottleneck. We always like to blame that on one individual or two individuals, maybe it’s the marketing team that’s the bottleneck, or the production team that’s a bottleneck. Usually that’s the case in these podcasts, that’s the bottleneck. But in your case, “Hey, we’re going to avoid bottlenecks because we have processes, and by golly, you better follow that process.”
Brigette: Yeah. So if you know who does what at each step, then there really shouldn’t be any issue of waiting for someone to do something, when really that person isn’t the one who’s doing that something. So this documents every step, every person who’s involved and what it entails. So if there is a stoppage, you know where that’s at, and you can go to that person and say, “Hey, what’s going on? Do you need some help?” So it really does help with just getting to move smoothly.
Dave: So on your team, do you have what I call Process Police, that go around and look, and, “Oh-oh. Brigette violated something, didn’t follow the rules. Cut a corner.”
Brigette: In our software we have what we call Projects, it does all of our projects and steps. We actually have deadlines, time deadlines. So you can see where you’re at, where you’re at in your deadline. If there’s an issue, someone on the team can look to see if you are behind and they can assist. Or you can look at the person who’s doing the work before you, and I can see if they’re having an issue. Then I can go to them and help them. So we actually do have projects that with time deadlines, to make sure that everyone’s work is moving smoothly.
Dave: Okay. I want to start my own process documentation strategy.
Brigette: Okay.
Dave: How do I start? Where do I start? Of course, I can call you. Actually here’s how we do this. I’d give you a call, and we’ll get a couple members from your team and my team will meet for a maybe wine tasting.
Brigette: Okay. I’m in.
Dave: You guys can present. Flight of wine and we’re good to go, right?
Brigette: Yes. Absolutely.
Dave: So yeah. What do we do to get started?
Brigette: Okay. So the first thing is, you have to determine the scope of the document. Are we doing just a process? Are we doing a procedure? Are we doing an entire company? So let’s figure out what you want to do. Is it just one piece of a staff, are we doing a complete process? So that’s the first thing. Let’s narrow down what you really want to do.
Dave: Narrow scope.
Brigette: Yes. So the next is we’re going to draft an easy representation that defines the roles, the procedures, the systems. So we’re going to explain the impact the process has on products and services. We’re going to identify the roles and who performs them, which I think is really important. Because you could have a document, but if you don’t tell who’s doing what, you’re going to get that bottleneck.
Dave: Get lost in the shuffle.
Brigette: Yes. So we’re going to outline the systems and the software used. So like for pension, we have a couple different softwares that we use. We have our compliance software, we have a tracking software. So we need to know in this process, which software are we using. And it’s probably helpful to tell someone why. Everyone loves why, why are we doing this? So make sure that they know who’s doing what, what software and systems are going to be used and why. And then we’re going to document the process from beginning to end, and you’re going to do it in an easy to follow format. If you can add pictures, pictures are great. People love pictures, especially if it’s got to do with the internet or following, steps. Pictures are great.
Dave: Oh boy. Here comes another initiative. I’m sure you guys thought that as you started this, but it sounds like once everybody got going, everybody bought in.
Brigette: Yes. Yeah. I don’t know how many of these procedures that I would go to when we’re doing the CEFEX, was let’s say an HR procedure. You pull it up and they tell you to go to this website. And then on this website you need to go here. Well they had pictures. Pictures are great. So I can look at where I’m at, and where I’m at on the website and go, “Okay, look this is the picture. Push this button.” So I would say you make it as easy as possible for people.
Dave: Hey, you know what, I’ve got another service offering that we can do. We can go out and visit with clients, we can talk about a cash balance plans, retirement design and CEFEX processes, all in one. Two for one call.
Brigette: Yeah.
Dave: Isn’t that great?
Brigette: We should do it.
Dave: Let’s go.
Brigette: Absolutely. Absolutely.
Dave: So again, the CEFEX, is that an annual certification? Do you have to go back for training?
Brigette: So every year they’re going to come back in and review our processes and procedures, and make sure that we are following what we originally signed up for. That we are following their standards, and then we should get re-certified. We will get re-certified every year. Right?
Dave: Oh-oh. Okay. Yeah, I like that.
Brigette: Yeah. We will.
Dave: You’ve gone, you visit with prospects and clients. With your experience with this, can you just kind of walk in and Kinda look around and tell and say, “Oh boy, this company doesn’t have the process documentation, any of that, that’s needed.” Can you tell now?
Brigette: Yes. So I go into meet a perspective client, and we want to talk about their current plan. I want to look at their plan design and want to make sure that it’s well suited for them, that it’s working for them. And when you ask do you have your Adoption Agreement or your Summary Plan description? And they look at you and go, “Oh, what is that?”
Dave: Where’s the …?
Brigette: Yeah. “Now what does that look like?” I know we’re in trouble. So that’s where obviously, their current situation, someone’s not working with them yearly to help explain to them what their plan document does, is it good for them, if they don’t even know what it is?
Dave: So you can spot it?
Brigette: Yes.
Dave: You can spot it. That’s really neat. As we prepared for the podcast, I really didn’t know much about the certification, so I was looking forward to picking your brain a little bit and see where it pops in. And of course, knowing your team and how hard they work, and where to go, they bought into it 100%, absolutely.
Brigette: Absolutely, yes. Yeah, they’re just glad that I did the initiative and did the work.
Dave: So, to kind of wrap up on our, on our points, we talked about, process documentation, why business owners should care. And I think you made that crystal clear. What are the business benefits of process documentation? You hit that one out of the park. How to start your own process documentation strategy, and I think he had some good ideas. I like the one with the, have the flight of wine as a starting point, as a kickoff.
Brigette: Absolutely.
Dave: So all of this makes a tremendous amount of sense. Again, efficiency leads to profitability, and leads to increase in value of the company.
Brigette: Absolutely.
Dave: And retention of employees, I think all of that is wrapped together. Would you say?
Brigette: I agree.
Dave: Great. Once again, congratulations to you and your team for earning your recent certification, and thank you for joining us on today’s episode of unsuitable, Brigette. Great.
Brigette: Thank you.
Dave: So our guest again today has been Brigette Lafferty, with Rea and Associates, located in Zanesville, Ohio. Go on our website, and see her picture. I think your picture’s up there.
Brigette: It is.
Dave: Click on it, read the Bio, give her a call, shoot us an email.
Brigette: Absolutely.
Dave: And you can learn more about the process. We’ve all learned a lot about processes today, and I can really see how reviewing an organization’s process can drive value throughout the company. Listeners, if you have questions, feel free to reach out to Brigette . You can either email, contact us at ReaCPA.com or contact her directly from the Rea & Associates website. In the meantime, if you enjoyed today’s episode, let us know. Like it, comment on it or share it, that’s our process. Don’t forget to check out videos of our podcasts on YouTube. Until next time, I’m Dave Cain encouraging you to loosen up your tie, and think outside the box.
Disclaimer: Views expressed on unsuitable on Rea Radio are our own, and do not necessarily reflect the views of Rea & Associates. The podcast is for informational and educational purposes only, and is not intended to replace the professional advice you would receive elsewhere. Consult with a trusted advisor about your unique situation, so they can expertly guide you to the best solution for your specific circumstance.