Highly accountable featuring Jim Redpath and Mark Gibbs with HLB Tautges Redpath written December 2012 by John P. Palen for Minnesota Business Magazine

Posted By John P. Palen, CEO & Founder of Allied Executives

Jim Redpath, managing partner at accounting firm HLB Tautges Redpath, recalls the day that audit partner and shareholder Mark Gibbs called him out in front of the team for being late to a meeting.
"You're 10 minutes late, Jim," he said. "How can we start this meeting if you're not here?"

Gibbs wasn't fired. In fact, this episode was part of the paradigm shift that has helped the accounting firm realize a 21 percent increase in revenue since 2008 while most accounting firms have remained flat.

But let's back up a few years. In 2003, the White Bear Lake-based firm made a bold move as one of the few public accounting firms in the country to convert to a 100 percent employee-owned business structure. The ESOP structure solved partner concerns about succession, but was also the first step in rethinking how performance and accountability tied to compensation.

In theory, everyone loved the idea of becoming owners. But when the reality of new responsibilities and processes set in, the road was bumpy even at the top. Jim Redpath wasn't the most consistent rule abider; in fact, he preferred leading from the hip. While this style garnered respect and results over the years, the wake-up call from Gibbs helped Redpath see that good leaders must walk the new talk.

"I had reprimanded the team about missing meetings and showing up late and unprepared," Redpath says, "but if I couldn't model that behavior myself, then we weren’t going to succeed."

Success also couldn't come solely from the rainmakers, Redpath added. "We have balanced the focus between rainmakers and producers." Rather than just reward the rainmakers, the firm rewards other team members for getting and keeping clients through marketing and excellent client service.

The firm also encouraged employees to stick to personal marketing plans that hold them accountable to nurture leads and increase firm visibility. Non-billable activities such as speaking, niche service how-to articles and sponsorships are highly valued to "be with customers where they hang out," Redpath says. Throughout the process, turnover has been surprisingly low.

While this strategy is not rocket science, it's a paradigm shift from complete reliance on referrals to proactive, whole firm business development. "It's an all-about-the-client attitude," that extends to how clients are billed, says Redpath. Rather than being on the clock, the firm has moved to a project-based fee arrangement with clients in order to show a higher value for their services.

To expand the paradigm shift, the firm has systematized many expectations and processes so that new employees quickly buy into roles and expectations.

Gibbs, who also serves on the board of directors, noted that maverick Redpath is a convert: "He is a rule follower regarding accountability to internal operations and procedures. He's big on systems. No one misses a team meeting anymore."

This doesn't downplay innovation, however. As one of the first public accounting firms in the country to go paperless in 2000, HLB Tautges Redpath has retained key professionals who can work remotely from the firm's headquarters without missing a beat.

Getting complacent with the status quo, after all, seems to be the commodity death knell for professionals, evident in firm consolidation. "When you're finished changing, you're finished," says Gibbs.

In fact, that's strong advice for anyone in business to keep on the break room bulletin board - and model it.

Tips for Accountability

1. Document individual roles and expectations for clarity and tie them to the firm vision.
2. Every principle and partner should be able to recite the status of the sales pipeline.
3. Create personal marketing plans for key employees, accountable to the marketing department and endorsed by senior leaders.
4. Share and distribute compensation among the entire team that contributed to obtaining or cross-selling new business.
5. Never come to a meeting unprepared to contribute.

Creating Customers for Life featuring Steve Garske and Mike Hilliard with Par Aide Products Co. written November 2012 by John P. Palen for Minnesota Business Magazine

Posted By John P. Palen, CEO & Founder of Allied Executives

I work with CEOs and owners who feel frustrated these days by pricing pressures, competition from outside the United States that encroaches on their market share, and a general sense that customers will drop them at the slightest pushback on requests. It's easy to get reactionary and lose focus on core principles when profits don't measure up to expectations.

This is usually the time when I give the "what do you stand for" speech. I ask these leaders about their promise to customers, their vision for the company, and why they got into business in the first place. It's a way to test their passion and endurance, to redirect their energy toward the original ideals that first made them successful. Often they’ll talk about personal passions and a desire to solve problems — and there’s usually a story of origin that reminds them of who they were, are, and want to be.

When Steve Garske took over the family business from his father, Joe, in 1986, he thought that growth was about developing more diverse products, having more inventory and selling more units per quarter. He was wrong.

At the time, Par Aide Products Co. in Lino Lakes was known as the originator of the cherry red golf ball washers found on so many golf courses. The patented up/down washing mechanism sprung from Joe Garske's passion for golf and his realization that ball washers could be handy after an ugly shot from the rough. He demonstrated his invention at a PGA Tournament in 1954 and the product line expanded from there.

But Joe never focused on the number of products. He focused on the quality of the products and the satisfaction of customers. His son quickly learned that sticking to the original brand had to be priority one.

"We innovate on products that our customers need, want and appreciate," Steve Garske said of Par Aide's business model. "They trust our quality through our brand. As a result, we can make margin and volume exceptions in order to bring products to market that support the brand and may promote other higher volume products."

Keeping customers involved in this model is also a big part of the brand. Not only do customers dictate the product line innovations, they also get immediate response to questions and problems. Par Aide doesn't employ a receptionist or an automated service center. Live customer service reps answer the phones and have the power to fix a problem on the spot.

"You can waste a lot of money making $50 decisions that may seem efficient but don't help customers," said Mike Hilliard, vice president since 2000. "As long as our customer service reps do things for the right reasons, no one can give away too much or make a mistake with how a customer problem is resolved."

Of course, not every product change or innovation is a home run. But sticking to customer satisfaction 100 percent of the time keeps Par Aide's brand approval high in the market. "The customers who I have met and discussed problems with...they are customers for life," Steve Garske says.

Instead of looking outside the company for reasons or answers to decreased profits, maybe the answer is on the phone right now with a service request worth staying late to solve. It just might lead to your company's next great growth opportunity.

Tips for Lifelong Customers

• Know what you stand for: who you serve, what you promise and how you price and deliver it regardless of the competition.
• Train and empower customer service people to solve a problem in whatever way they think is best. Build a culture of service.
• Keep innovating even if sometimes you don't receive the expected ROI.
• Marketing must consistently identify who you are through your website, catalogues, ads, tradeshows, clothing and print materials.
• Act promptly to meet customer needs and stay late if necessary.

ALMOST LIVE from the 2015 Allied Executive Economic Symposium.

Bob Baur, Chief Global Economist for Principal Financial Group, discussed:

• how the recent global trends are unwind and the world is re-balancing;
• the closing of the China Investment boom;
• Reduced growth in China's economy on a permanent basis (due to 1 child policy shrink in labor force, peak productivity has passed, cost competitiveness diminishing and excess productive capacity has been achieved;
• the ending of the commodity super-cycle, which is undergoing a structural change that should last for years;
• closing down of global outsourcing and increase in domestic manufacturing, which should lead to increased wages for the middle class and continued reduced unemployment;
• European and Japanese economy expected to expand;
• Vanishing inflation phenomenon expected to continue with excess supply and capacity;
• Consumer will return to drive the economic engine;
• Era of low returns and expected increases in stock market to match profit growth.

Charlie Weaver, of the Minnesota Business Partnership, made a strong case for doing business in Minnesota from a corporate culture and quality of life perspective - including noting that St. Paul is the number 1 romantic city in the USA .  His discussion revolved around several initiatives legislatively which would be harmful to the Minnesota business community and went through some rather staggering statistics regarding the current tax burden shouldered by Minnesota businesses and their owners.

My good friends, Dale Klein (CEO of Parallel Technologies) and Travis Penrod (CEO of Interstate Companies, Inc.), together with Dan Ferrise (CEO of Miller Manufacturing) and David Green (COO of Supply Chain Services) spent ample time explaining the key performance indicators that drive their leadership of their respective organizations.  Travis explained how he starts with the global economy and works down from their to his sectors.  Dale discussed monitoring lead generation efforts so as to ensure that sales groups stay active.

The panel also discussed corporate culture and core values.  Dan Ferrise explained how the first step of his company's business planning process starts with a review of the mission statement, goal statement and core values statement.  He says "we hire to it and live with it."  Dale Klein discussed the intangibles his company strives for to make the work environment a fun place to be, i.e. basketball courts, golf simulator.

Next up - compensation strategies.  Each panel member described the percentage of growth in compensation for their teams - primarily reflecting an across the board cost of living increase.  They described the use of variable compensation to drive performance and having the variable measurements tie to culture.

This was just some of the highlights of this event.  I encourage all business leaders to explore the power of collaboration with peers.  Invest in yourself by joining Allied Executives.  Tom Fafinski (Member since 2002, part-time group facilitator since 2008).