On episode 18, this is an intervention: the positive psychology of hard conversations, you’ll learn how to be one part friend, one part accountant and 100 percent business psychologist. Mike Taylor, CPA, an executive principal at Rea & Associates, joins Mark to talk about the benefits of having the hard conversations with business owners. For more than 45 years, Mike has helped clients overcome their challenges and achieve sustainable growth by serving as a trusted advisor who’s not afraid to say what needs to be said. On this episode, Mike shares what he has come to identify as the key attributes of becoming a true trusted advisor and touches on the importance of learning and gaining confidence in the art of speaking honestly – even when it’s hard to do. Start listening now to learn more about why it’s important to form strong relationships with the men and women you trust to advise you throughout your journey as a business owner.
Transcript
Mark: Welcome to unsuitable on Rea Radio, the unique financial services and business advisory show that challenges your old-school business practices and the traditional business and culture. You'll hear from industry professionals who think beyond the suit and tie to offer meaningful, modern solutions to help you enhance your company's growth. I'm your host, Mark Van Benschoten.
We work with a lot of business owners and we continue to see many of them stuck in the trenches. Instead of executing a plan to grow the business, they are putting out fires, micromanaging their workforce, or doing a number of other things. This is a very important episode and what we're going to talk about today is not necessarily easy to hear, but it is necessary.
We're going to get started and I'm so excited to have Mike Taylor, who is an executive principal here at Rea, on today's show to help guide us along. Mike has been with us at Rea & Associates for 45 years.
Mike: That's right.
Mark: Just a couple ... between you and Spittle.
Mike: Yeah.
Mark: He has worked with countless, closely-held business owners over the years and has had many hard conversations with them to ultimately help them approach their business differently. Mike, welcome to unsuitable.
Mike: Thank you, Mark. Glad to be here.
Mark: Before we get started, I just wanted to personally thank you. I don't know if you remember this. Eight years ago in December, I just decided to come over to Rea and it was kind of a hard decision for me to make, and you called my house. I'm like, "Why's Mike Taylor calling my house?" You said, "Hi, Mark, how are you? I don't want to talk to you. I want to talk to your wife." And you spoke to my wife. It was such the right thing to do because she was quite anxious. I was well-established where I was. I was very comfortable. Had a lot of flexibility. You appeased her and whatever you said to her, she was like, "Yep, this is the right decision for us," and we've never looked back. I wanted to personally thank you for that.
Mike: Well, you're welcome. I remember that conversation, actually. I'm glad I did it and I'm glad you're here.
Mark: I'm very glad you did it, too. It made my life a lot easier these last eight years. To get talking about the subject of hard conversations, I've received some of those in my career and I've given some of those in my career and they're never easy.
Mike: They aren't easy.
Mark: How do you get through them?
Mike: I think there's a couple things. I think I've always had that ability, but as you get a little older, I think it comes a little bit easier. And ultimately, you get to the point where you know a client has to hear something and even though it's a difficult message to deliver, your role as a consultant or a financial advisor is to be honest with them. I just actually won some awards up in Holmes County which was-
Mark: Not to brag or anything.
Mike: Yeah, it was kind of nice. The downside is they only give them to old people.
Mark: You get two then?
Mike: Yeah, that's right. I did. I think one of the things Paul Weber actually made some comments in the newspaper and at the award ceremony and one of the things he said was, "You know, not only is he a friend, but he could always look across the table at me and say whatever needed to be said no matter how hard it was." I think that's something that's all too often lacking.
CPAs, I think, have a tendency to be a little bit afraid of their clients. Don't know exactly where they stand sometimes in the relationship. I think a lot of people in our profession really miss the boat because of not having the confidence and don't really feel they have the ability to look at a client and say, "Hey, you need to do this."
Mark: They lack the confidence. For some reason they feel, "I don't know. If I say this, I might be missing something," instead of just putting it out there, I feel.
Mike: I think that's right. The interesting thing about a lot of times where I find myself, I may say something in a meeting to a client and before that meeting is over, I might say, "You know what, the more I've thought about that, I think that's wrong. I think we need to go in this direction instead of what I said 15 minutes ago or 30 minutes ago."
Mark: Having the ability to recognize that I think is critical in your client's eyes or whoever you're talking to. They know that your intentions are right. You're not there to be right, you're there to be helpful.
Mike: Yeah, I think that's exactly right and you're not always going to be right. You're not. Even if a client does something that you've suggested, if it's wrong, you just need to come back and say, "Hey, you know what, that was a bad decision and we need to move on from that."
Mark: I haven't been in public accounting as long as you. A few years behind. You do get nervous. You get anxious. A lot of clients I've known for 25 years and you're still like, "Wow, this is going to be hard," but for myself to prep and say, "I'm coming from the right spot. I'm coming to help. I don't have to be right. If there's a piece of information that I don't have, I'm going to get it," I have to kind of psych myself up for those conversations.
Mike: Yeah, I think you do. You have to prepare for that. Oftentimes it's not spontaneous. I think if you're in meetings with clients and you have ongoing meetings with clients, sometimes you do need to just work through a process before you try and decide, "Okay, am I going to have a pretty frank, brutal conversation?" You just have to get a sense. Sometimes it happens quickly. Sometimes it happens in the same meeting. You get a sense that, "Look, this is just not going to go any place and unless I say really what I believe is true, we're just going to continue to beat this dead horse."
I told one of our young guys the other day, they said they were in a meeting and the one person just was kind of going over and over and over the same thing that they'd already been through for a meeting before that and now this meeting and I said, "Why don't you just stop the meeting and say, "Hey, you know, let's move this meeting out to the barnyard and find a horse because there's probably a dead one out there we can beat someplace.""
Mark: Adding a little levity always helps, right?
Mike: It does help. Yeah, it does help. I think the other thing the accounting profession kind of misses out on is playing the role of psychologist because so often, I think 80 percent of my time for the last 30 years, has been a psychologist and not an accountant. I didn't take any formal psychology courses. I wish I would have, but I think if you look at that a little bit differently with a different set of eyes on to say, "Hey, look, what do they really need right now? Do they need an accountant, somebody that can go over their numbers, or do they need a psychologist? Somebody who can help them work through some oftentimes difficult issues."
Mark: I wrote down, "training." Have you received any specific training?
Mike: I think it's 45 years of experience.
Mark: Experience. OJT.
Mike: I think it is on-the-job training. I don't know what kind of formal training you could get for this other than I do think some introduction to psychology 101 and 102 might be beneficial. A lot of it just comes with experience. I don't think you need 40 years of experience to do this. I think once you get past probably 10 years, I think you have the experience that it takes to really use your skill sets and have the ability to really consult.
Mark: As I'm planning for these meetings, preparing and psyching myself up, I challenge myself. Do I believe this to be true? Is the right information? If I was them, would I want to hear this? Making sure that I'm coming from a well-grounded position with the facts that I have at that time. What other things might somebody look at in a preparation?
Mike: You know, I'm not a big preparation guy for these kind of things. I think the preparation needs to be, look, my relationship with the client is such that no matter what I say, they're going to take it in the right spirit. That they're going to know that it's not coming from something I want to do because I had this mean streak and it needs to be exercised occasionally.
Mark: Or you're trying to sell them another service.
Mike: Yeah. I think they need to know it's coming from the heart and it's what you believe. The reality is they don't have to take the advice no matter what. I've told a lot of people, "You know what? You pay me for my advice. Whether you take it or not is not up to me."
Mark: Good point. I like you mentioned the word relationship. That's what I find so satisfying in this career is the relationships I get to have with people and having that good, strong relationship, not just, "Here's your tax return. Here's your financial statements," but, "Let's talk about issues that maybe aren't reflected in the financial statements. Succession planning, things of that sort."
Mike: I think the biggest thing I've found in terms of relationship building is to build that relationship around the client's family. Knowing the family, knowing the spouse, knowing the children, because in closely-held businesses, that's where a lot of issues ultimately come from. Building the relationship so you just don't know the business owner, you also know their family and know something about them. I think that's helpful in terms of strengthening the relationship and being able to give good advice when it comes to succession planning, transition to the next generation, and those kind of issues.
Mark: I appreciate when people ask me about my family. I just assume that people I'm talking to, they appreciate when I'm sincere about their family. It goes both ways.
Mike: It does. I think that's exactly right. I think really the relationship side is ultimately what is most rewarding. That's really, I think, where you can provide the best guidance, the best advice, when you've got that relationship that's really very solid.
Mark: Yeah, I enjoy a lot of my relationships. My friends are my clients. I didn't start out, "Oh, I'm just going to become friends with this guy to get another piece of business." I just enjoy their company and enjoy what they teach me and we just build a relationship off of that.
Mike: Yeah, I think you have to become a trusted advisor to your clients. I think all too often, whether it's the accounting profession, and I think we're our own worst enemy frankly, but it could extend to the legal profession, it could extend to a lot of other professions, that relationship just never rises to the level of being a trusted advisor. There's just kind of a standoffish relationship and you never get to the pinnacle. I think if you look at our practice in Millersburg, I think that's something that I was able to accomplish for whatever reason. I'm telling you what, I'm not the smartest CPA in the world.
Mark: Spittle said that, too.
Mike: Yeah, well neither is he, by-the-way. I've surrounded myself with good people that are a lot smarter than I am that do a lot of the work for our clients, but building the relationship to the trusted advisor point is really important and it's really satisfying and it's financially successful.
Mark: I agree with you. I think we shoot ourselves in the foot. We're too busy running from engagement to engagement to engagement.
Mike: Yes, we are.
Mark: We don't take the time to have conversations, to spend 20 minutes to ask about the family, the child off at school, what's going on, and so you develop that relationship. When you have to have that hard conversation, you're so far behind the 8 ball.
Mike: Yeah, I think it is a profession that's focused on, unfortunately, primarily hourly billing rates. I think when you're talking about partners and senior managers and an accounting firm, they're afraid to spend 20 minutes with a client that they might not be able to bill. That's just the wrong way to approach it. Those kind of conversations and time spent on personal issues, not just business, really help to build the long-term relationship. In the end, it's a much more successful model.
Mark: It's successful, rewarding personally, not just financially. I agree. What advice would you give to somebody? You mentioned this 10-year horizon. I agree with you. You need to have some tenure under your belt. I don't want a first-year staff person going out there and reading a riot act to a client, but what other advice would you give somebody in that 7-, 8-year, what kind of experiences should they be having?
Mike: I think, you know, I'm not sure I did a great job with this, but I know that something that we're looking at and working harder at, to bring people, and I've done that for the last five years probably. For sure I've done a better job. Bring people along with you to the meetings. Let them hear what goes on. Let them hear some difficult conversations. Let them hear how clients react to when you're really honest with them, how much they appreciate that. I would encourage staff people to push for that.
Mark: Be proactive.
Mike: Yeah, be proactive in that regard because partners are in their own world. They're doing their own things. They're busy people and sometimes you just don't think about that. Younger people that have an interest in working with clients and building relationships, they just need to push hard to say, "Look, how about involving me in some of these meetings along the way?"
Mark: Yeah, that's a great point. Hopefully they take some ownership in that. They want to get to that trusted advisor level, not just, "I'm your compliance guy. I'm your audit guy. I have this relationship."
Mike: Yeah. That's exactly right. In terms of transitioning into a retirement, some of those relationships, they're just going to change. They might be better. They might not be quite as good. It's hard to say, but you need to prepare both the client and the younger partner or whoever is going to assume full responsibility for that client. You just need to prepare both sides and hopefully it goes well.
Mark: Something that you mentioned early on and I think it's very true and I'm glad that you said it is, you start in a meeting and you're going down a road of Position A and that's what you're advocating to the client. I think you said 15 minutes later you're saying, "Wait a minute. I think we should go Route B now." I think that is so true and I think people need to be able to accept that and say, "Oh no, I'm thinking about this differently and here's what I'm thinking now." People need to be able to be honest and say, "You're right. I think we made a mistake there. I think we should consider something else."
Mike: Yeah, I think that comes back to the relationship side and having the confidence to say, "You know what? Fifteen minutes ago I was wrong." That's what it amounts to. "I just hadn't thought some things through and I think we just should even stop thinking about moving in that direction because that doesn't make any sense."
Mark: I think clients appreciate the honesty.
Mike: They do.
Mark: None of us are perfect. We're all going to make mistakes. They're like, "Oh, this person's really thinking about it. They're getting down into the weeds and they're getting onto my plane."
Mike: Yeah, I think something you said kind of in the introduction that struck me is a lot of business owners are consumed by their business. All too often, they end up working in their business and not on their business, as we like to say. Trying to move them out of that mode is sometimes difficult, but really very important because really you have to take a step back. If you're consumed in the day-to-day operations and you can't think about the important things for the business, where am I going to be in a year, in three years, I think part of what we do is to get them to think, "You know, look. Okay. I've got to find somebody to take on some of the responsibility that I'm currently doing." Most of the time I think you can make inroads there. Sometimes you can't fix it completely, but you can do better.
Mark: We were talking about advice for a young staff person. What about advice for a young business owner? Maybe if you're not having hard conversations with somebody, you should seek them out?
Mike: Well, yes. I mean I think if we've got clients, they all need more help from us than they're getting. I probably, even doing what I do, and I think I do a pretty good job at it, I sit back frequently and say, "Okay, why aren't I doing this?", or, "Why aren't I doing that?" There's tremendous opportunity out there. All of a sudden, a client will bring something up and say, "Well, what do you think about this?", because they heard it from another person they know or another advisor some place. You think, "Holy cow, why didn't I think about that?" I think you really need to take a proactive approach to a lot of this consulting stuff and the relationship building. Lot of things you can do and a lot of things we can all do differently to be better at what we do.
Mark: Before we wrap up, do you find this rewarding? It's never easy to have a hard conversation. At the end of the day, are you glad you did it?
Mike: I am. I have a hard time thinking of any crucial conversations that I've had with people that I really regretted it afterwards. Maybe one or two. Maybe I didn't read things quite right on the relationship side, but it's seldom that I felt, "You know what? I wish I wouldn't have said that." Sometimes I think when I was younger, maybe I wish I would have said it a little gentler. As I'm getting older, I think I do say things a little bit gentler than I used to, but no. You just can't regret that. You know what? If you did something stupid, call them up and say, "You know what? I'm sorry. I shouldn't have handled that way and it was a stupid approach, but there's some golden nuggets even in that conversation that we need to think about and focus on."
Mark: Not be afraid to have that. Before we wrap up, I want to ask you one question that we ask every guest. If you could have one superpower, what would it be?
Mike: I said this not too long ago in an article after I won the award up in Holmes County, but I think the superpower I would like to have is to be able to make people believe in themselves. You know, I try and do that whenever I can, but a lot of people just don't believe in themselves.
Mark: Lacking confidence.
Mike: Lacking confidence. Great, great people that I wish you could just wave a magic wand and say, "You know what? Believe in yourself."
Mark: That's great. That's very insightful. Thanks for joining us today, Mike, and thank you to our listeners for tuning in. We have plenty more resources for business owners at www.reacpa.com/podcast. Stop by and check it out. Don't forget to subscribe to Unsuitable on iTunes or SoundCloud. Until next time, I'm Mark Van Benschoten for unsuitable on Rea Radio, encouraging you to loosen up your tie and think outside the box.