From Tradition to Transformation: Catalyzing Growth with Eric Joern

Eric Joern is a Partner at Kaizen CPAs + Advisors, a position he’s held for nearly four years, previously serving as Managing Accountant for over a decade. A graduate of Columbia College of Missouri with a degree in accounting, Eric is a licensed CPA and a key business advisor at Kaizen. Coming from generations of entrepreneurs, small business is in his blood. He has spent his working career getting his hands dirty with concrete, increasing profits and efficiency, managing an automotive service department, and currently is a key resource for many small business owners. Eric is currently the lead on Kaizen’s Automotive concentration, with years of experience as an Automotive Service Advisor and connections in the industry to better serve his clients.

Transcript:

Hey everybody. Thanks for joining us today for another episode of the CPA Life Podcast, the podcast that’s focused on showcasing some of the firms in today’s market that really fly under the radar—firms that have a passion for delivering outstanding client service but not in a manner that causes stress, chaos, and an out-of-balance life for their team members. Today on our podcast, we are joined by one of the partners of a firm just like that, a firm whose primary focus is the health and wellbeing of their people. So today we are joined by Eric Joern, who is one of the partners with Kaizen CPAs and Advisors. Eric, welcome to the show.

Thanks, John. I’m really appreciative of you bringing me on the show today.

We’re excited to dig in and learn a little bit more about you guys. One of the things that is really interesting, and I think it’s one of the dynamics that is taking place in the industry today, is firms like you guys that stereotypically, one, people know about you maybe in your local marketplace. On a national level, you fly under the radar. But even though you are based in Antioch, Illinois, population what? Is it 14, 15,000?

I think about that, yeah. Crazy.

So even though you guys are in Antioch, Illinois, kind of smack dab in the middle between Milwaukee and Chicago, you have the ability, because of the way you guys have structured your business over the last three, four, five years, to make an impact nationally, not only on the marketplace but also in people’s lives when you look at hiring from a deployed standpoint. So I applaud you guys for some of the changes that you’ve made. So we’re going to dig into some of those today. I’ll fire some questions at you about that. But one of the things that we like to do at this point of the show, before we dig into who you guys are, where you’re going, what you’ve done, things like that, is learn a little bit about your journey, and how you have gotten to where you are today. So give us a little bit of your story, Eric.

Yeah, definitely. Throughout high school, I thought I was always good with math. Math was a strong subject of mine. So naturally, I thought I was going to be an engineer. I took my first CAD class and I said, I cannot sit in front of a computer and design things all day. Go off to college, trying to figure out what I wanted to do. I always liked finance, so I geared towards finance. I was double majoring in finance and accounting. Accounting was interesting to me because I took my first accounting class, we started off full, by the time we finished the class, there were about five of us left.

Oh, wow.

I said there might be something here. Finance ended up dropping off because everybody that I knew that went into finance ended up selling life insurance to their friends and family. I didn’t want to go down that route. Ironically, now I run our sales and marketing function for the firm, things somewhat came full circle, but that’s a whole different situation. So, while I’m in college, I actually just got a job as a porter at a Toyota dealership just to make some money on the side, help pay bills, and all that fun stuff. Picked up though, kind of how operations were working, how things were going. Became a service advisor at a certain point once they needed some help. So we helped figure out what’s going on with people’s cars, give them the recommendations, help them map out how to have a healthy vehicle over the long term and how to take care of it.

Finally, I graduated college and while I was kind of having fun doing that, I learned a lot about being a professional, selling, working with customers, delivering excellent customer service and advising, helping people make decisions about what they need to do. I wanted to put my schoolwork to work and I actually started with James Hamlin & Company. I actually did a short internship. I wrote service five days a week. I had Tuesdays off, and I went to school at night. On that Tuesday, I got an internship at a larger corporation doing just general ledger accounting and big corporate. And I figured that was not my life either. That was back to the computer, not a lot of interaction, contact, especially as I spent multiple years advising people on what to do with their vehicles. So I said, I need to at least be people-facing with this financial field that I’m in.

So I applied at a firm called James Hamlin & Company, just off LinkedIn. Job market was not super easy at that time. So it was a little harder to do that. And I did that internship on my one day off a week, just so I could get some experience so I could go to the market with direct accounting experience. So I start here at the firm and I’m just kind of finding my way in the accounting field. Over the years, I said, “Hey, I know a lot about how the automotive repair business works, and how they look at things from a number standpoint. I think I can bring that unique value with what I’ve learned here at the firm working with small business owners and really create a differentiated product.”

So I went to Clay with this concept and he said, “Yeah, sure. Go ahead. Go nuts. Chase it.” So I got on a plane, flew out to Texas, actually, and went to my first automotive conference. Made some contacts at the conference. Nothing really happened from there. I got a little bit back and forth from it, but nothing crazy. It didn’t feel like it was going to take off and become a thing. All of a sudden, COVID comes. Obviously, our business landscape changed completely, but it brought up an opportunity for us to work with businesses across the country because the landscape changed. All of a sudden, it became much more accessible for shops around the country to start working with us. So, that’s really ballooned our national presence. Prior to that, we were mostly a local CPA firm. However, we have roots inside of what we’ve created today. So this wasn’t something where we completely started from scratch—we used those roots and we had some of those foundational items in place already.

So, we had some employees that were really great here at the firm, and for some odd reason, they had to relocate out of state. So we built a remote atmosphere so that they could work. We actually would ship client documents to them because we wanted to retain people who were really good performers for the firm. The firm itself, James Hamlin & Company, became Kaizen CPAs. And we’ll get to that story at some point in this discussion. There’s a lot of stories. But James Hamlin & Co. is actually a very old originating firm as part of a franchise model called Comprehensive, which was a write-up accounting firm. So we were doing write-up for small businesses for almost forever. Comprehensive became PASBA. Now PASBA also promotes the same business, it’s a very similar business model, where we were servicing small business owners, doing the monthly accounting and the tax work for them. And then over time, through acquisition, through growth, through just serving our natural markets, we also took on all sorts of traditional accounting firm work, you know, and it’s something that happens in the maturation process, I think in most firms is, if you talk to most firms, they don’t start off only having a very, you know, narrow focus. They generally take everything they can because you got to run a business.

Gotta pay the bills.

Gotta pay the bills. What we found though, is over time, it really started to make a lot of sense to narrow that focus. So as COVID kind of changed the landscape for everything, we also said, Hey, we’re going to go through a rebrand. At that point in time is when I became a partner and then we rebranded the firm to Kaizen CPAs, because we wanted to change the way we work. We wanted to have a more digital presence. We wanted to use and leverage technology and work with people across the country. So we could have employees across the country as well, and not be bound to this process that just hasn’t evolved over so many years.

Right. So you started with the firm right out of college, 2013. And at that point, would it be safe to say that James Hanlin & Company, which has a legacy that goes back to the 60s?

Absolutely.

Would it be safe to say that at that point, and for seven years moving forward, really until COVID kind of forced all of us to change on a dime, it was business as usual, stereotypical environment, culture, what we did, how we did it, local market people sitting in the office, for the most part, that kind of thing?

Absolutely. Yeah, we had some exceptions because we made things happen for our people when they needed it, but, you know, we were very much a traditional firm. One thing that was very fortunate is we did implement Microsoft Teams as an environment just prior to COVID. So we were able to actually adopt very easily because we did have some of those things sprinkled in our roots, but over the last several years, we’ve really changed our client base and we’ve really focused on creating those streamlined processes and procedures on the work that we can, right? We want to systemize all that we can because we know in our industry, you have to use a lot of judgment and thinking and research and all these things that go into that. But where you can eliminate those things and systematize it, it takes a lot of that work off your plate, right? We don’t want to approach the same task and have to remember, okay, I’ve got to go do this and that. If we put it inside of a system, we can kind of do that work on autopilot, which frees up our most important resource, which is that critical thinking skill to really address those key problems for our clients.

Yep. I’ve always had a kind of simple mindset that if hands have got to touch this more than three to four times, we need to build a process for this. There’s got to be a system in place that says, ideally, how can we automate it? If we can’t completely automate it, are there things that we can do from an SOP perspective that make the replication of this thing that we’re doing a much more automated process, you know, maybe not a hundred percent systematized if you can’t design something for it, but how can we somehow, someway automate pieces of this, if not all of it?

Absolutely.

It’s something that creates more efficiencies in the overall work. So you guys hit 2020, and it sounds like what you guys had done up to that point was very similar to what some other small to midsize firms had been. I’m going to use the word “forced,” but I don’t really want to, that’s probably not the exact best word for it, but I can’t think of another word right now. Basically, you had employees that were quality people, great assets of the organization that somewhere in that previous seven-year period that you were part of the team had stepped up and said, “Hey, love what I do, love where I do it, but I’m moving to Nashville, Tennessee, Fort Myers, Florida, whatever the case may be. I’ve either got to resign, or we got to figure something out.”

Exactly.

Much like a lot of forward-thinking firms, you guys kind of figured it out, which you didn’t know at the time was preparing you for what was going to happen in March of 2020. So March of 2020 hits, what were some of the drastic changes that happened at that point? I mean, did everybody go remote for a period of time? How did you guys address that? What was the impact on the team? That kind of thing.

Yeah. It’s so hard to even think about that period of time now that we’re, you know, over four years past it, but you know, we started off, hey, everybody, grab your stuff, take it home. We’re going to be working from home. We had some people that would come in, very few, just to get things out in the mail or whatever needed to happen for that time being. And then throughout that first major block, you know, almost everybody was remote, and very light crews would still come in. Some people still wanted to come into the office once, you know, we kind of understood what was going on.

What really changed was a lot of people just ended up never coming back on a consistent basis, some of them, you could definitely draw a very easy correlation between commute and who stayed at home primarily. You know, anybody with over a 30-minute commute, it was like, oh, saving that extra hour in my day actually, you know, is a huge impact, especially, you know, you take out eight hours for rest and recovery, you’ve got 16 usable hours in a day, getting one hour back is a huge impact on your day, so, you know, it makes a lot of sense that, hey, can we save some time in that world?

You know, to a certain degree, when you have a lot going on and we did, right, we had PPP, ERC, it was very easy to dive right into that work-from-home atmosphere, because we were so busy, because we were doing whatever we could to help our clients at the time because we were worried that people were going to go out of business. So our team literally were meeting all day, every day to deal with all these different things coming up. We probably worked a lot more hours than we liked—but we were doing that to help our clients through, you know, a global emergency.

But what really, we appreciated from that situation is that our clients started to view us differently too, because we really shifted and focused into that advisor role. We took control of all these different programs, how to make it through COVID and the shutdowns. We really took that advisor seat and it really shifted the way our clients looked at us and actually valued our service. It went away from as much transactional work to a lot more advisory-based work and they really felt like we became their trusted advisor through that process.

And I think that, again, the industry saw that shift and some people jumped on board and continued down that path. Others, you know, went back to what they know and what they were comfortable with and what they were comfortable in. You guys have continued to ride that wave. Talk to us a little bit about, you know, how you guys have made that shift. Prior to COVID, how much of your business was monthly recurring revenue, fee-based work, versus one-off, compliance-focused, transactional type fee work?

So, prior to COVID, we were a lot more advanced than most firms in that regard, because our model was built on a monthly repetitive fee, the core of the business. We might have had a 50-50 split back then. But now, coming in today, you know, we made a decision this year to almost entirely offload our non-related, tax-only work. We’re going to be close to a hundred percent relationship-based billing, so a monthly repetitive billing or maybe some extra billing for the shareholder of that business, or some type of relation to that business if they have that and it’s, you know, it creates a lot of predictability in the firm. It’s a lot easier to measure. It takes a lot of work off your plate when you don’t have to stop and invoice everything you do.

We don’t have to track time because we try to attribute value to what we’re doing, and that’s what we charge on the monthly fee. So we don’t track time as CPAs executing the work, right? We don’t have to worry about that. We know if we provide the right amount of value, we can charge really, anything that’s way beyond hours, right, it’s all about what value we bring to that business.

Yep. I’ve said several times on the podcast, our relationship that we have with the CPA firm for the last four years has been a monthly fee-based, you know, our monthly recurring revenue charge. And even before that, I don’t think I ever asked my CPA, hey, how long did it take you to do my return? I really don’t care how long it takes them to do it.

Exactly.

That’s not a concern for me. All I want to know is, is it done? Was it filed on time? Am I getting money back or do I owe money? And the beautiful thing, I think that from a consumer standpoint, and I’ve got to believe from a service delivery standpoint, one of the beautiful things in the model that you guys have in place is gone are the conversations of, “Hey, you owe the IRS X amount of money,” because we’ve been proactive about this, stereotypically, that person knows what that bill or refund may look like going into the year. And very rarely, if ever, is the conversation of, “Oh, and by the way, here’s our bill as well.”

Yep. Yeah, that’s getting hit with the double whammy there, right?

Yeah, and nobody likes to have those conversations at all.

No, and that is kind of the beautiful thing of what we do is, since we’re working year-round, there’s no surprises for them, higher level service to them. But it does, it takes out a lot of that work and conflict. I don’t have to have an hour meeting with my client to explain the results of their tax return, because the filing of a tax return now just became a formality. It’s not an event anymore. So it’s, I mean, theoretically, we do, we like to obviously give them a synopsis of what happened.

Right.

Very small synopsis, but theoretically, we don’t even need to have that conversation because we already knew it was coming all year round. It’s fun to actually tell a client when you’re within a few dollars of what we projected back in the fall. It creates a better product and a better experience for both the client and for us.

Well, and I would assume that the person sitting at the desk level that’s building that relationship, that’s having that relationship, that conversation, it’s a lot more productive, a lot less stressful. There are fewer tenuous moments preparing to make that call. No one has to, euphemistically, get behind them and massage their shoulders and say, “You’ve got this, you can do it, make the call!” It’s just another call in the course of business.

So what has that done, moving to that path where you look at, hey, we’re not having to track time anymore from the standpoint of utilization and realization. We’re not having to make those phone calls to clients anymore saying, “Hey, you owe the IRS X and you owe us Y.” Just those simple things, what does that do from a culture standpoint, from a stress standpoint, when it comes to the people in your firm and the way that they approach their job?

So actually, even going back to, you know, what your tax season experience is, right? So back when, I mean, we used to have to do bookkeeping in the middle of tax season, right? So we’d drop off, if you’re lucky, just a set of bank statements, let alone a box full of receipts or whatever it may be, and you’re sitting there tallying up stuff on, say, March 1st, for tax returns, then you have to then go prepare. Well, we want the books of our clients ready to go, say, by February 1st or even earlier if our tax software is ready to go. So it’s a matter of, we did all the hard work all year round, spread out, which takes a lot of the ebbs and flows out of the year to more of a steady, predictable year. And it makes the filing of the tax return again, more of a formality, right? We’re getting it in the software, we’re balancing it out and getting the tax return out the door. And it’s not, you know, we’re not pulling these 80-hour work weeks plus there.

I mean, I can’t tell you how many people I’ve talked to that are like, “We’re working 100-plus hours the last week of the deadline,” and I’m like, I don’t want anybody filing tax returns on a deadline day, let alone like one or two days should be that one last piece of information, we’re going to wrap this up. We want to be done early because we set up good systems and processes to do it. And it takes, like you said, we’re not on the deadline day calling up our client, sweating and saying, “You need to go to the post office with a $100,000 check right now.” Talk to anybody who’s been in this business long enough, you’ve made plenty of those phone calls over the years. It’s a very, very random occurrence if that were to happen. That would be a total outlier. We had no idea. Something came to us at the last minute that we had no idea about.

Well, in the reality of things, you’re always, if you run your business efficiently and effectively, and like you said, you have processes in place, we have systems in place, we’re having monthly conversations with clients, we know what’s going on, it takes those conversations you’re talking about to an exception level, and you can always deal with the exception when it arises, if you have solid rules in place. I think that one of the mistakes that most businesses make, not just in the accounting side of things, but, you know, you can throw the talent management, talent acquisition side of the business into it, accounting, you know, it doesn’t matter. I think part of the problem with businesses that are helter-skelter is they spend more time running their business by the exception and dealing with the rule when it arises, versus having black-and-white systems in place to begin to say, “Okay, this is what we do, how we do it, when we do it, where we do it, let’s move the business forward.” Have you noticed, making the change over the last four or five years, have you noticed a difference in the demeanor, the attitude, the “tone” of the office, if you will, when it comes to day-in and day-out, people doing what they do?

I can’t tell you how much relief you get out of the staff. When they come to you and say, “This client is not a good fit. They don’t want to fit the process, and they don’t want to work with us,” and then we say, “Yeah, let’s terminate our relationship with them.” That feels good to me as a partner, even though it hurts us, you know, on the P&L for the firm. But if that motivates that team member and it makes their day better, if they feel like, if they’re feeling the pain when they’ve got to pick up a phone and call a client, I’d be foolish to prioritize the P&L over my staff’s experience here at the firm. And because we’ve changed that, when we told our team we’re not taking on any more annual tax work, everybody’s thrilled. Everybody was absolutely thrilled.

Yeah, I would imagine that creates a bit of a higher level of peace in their life. And I think it sends a message to your staff that we’re taking into account these things that cause stress in your life. I had a mentor of mine once say, in his words were similar to, you know, there’s going to be enough crap that’s going to bite us in the butt that we’re never going to see coming. So the stuff that we know is going to bite us in the butt, why do we take it on? There’s no reason to. It’s going to be a problem. So when you have that discussion with your people, when you’re able to say to them, “Hey, if they’re not a good fit, we need to terminate that relationship,” what does that do for overall morale? Not just with that one person, but with that team or the overall operation?

Yeah, there’s a multitude of effects of it, right? So you get the immediate, you know, when us as a firm has the back of the team, that automatically is a great inspiration, right? That says we’re choosing them over the client, which is, you know, we all grew up in a world where the customer’s always right, and that’s not necessarily the case. But it shows that we are prioritizing them and their livelihood. And not only that, but it also eliminates these disruptions in the process. You know, when we’re working with our clients in a monthly cycle and everything is flowing, that’s when everything works the best and most efficiently, it’s when everybody’s the most comfortable, calm, cool, collected. It feels good around the office when things are working well. And then the minute you throw the kink in that cycle, and everything has to halt because, you know, somebody walked into the office and said, “Hey, I need somebody to prepare my tax return,” right? That’s when frustration would boil over. And now I got to figure out how to get that wheel moving again. And that is so disruptive to their day, and the next thing you know, “Hey, I’m behind an hour or two, and I gotta stay later because I want to wrap this up before I go.” Whereas, you know, save an hour or two, or, you know, we don’t take that on, they continue their cycle, maybe they’re done three hours earlier than expected, and they can go home early and spend a little bit of extra time with their family, and that, to me, is a huge win in my book.

Yeah, I think when you’ve got team members that are working in an environment where they know that they are the priority, an environment where they know that their wellbeing is at the forefront of leadership’s mindset, those people tend to be willing to give a little bit more when the time does come, when those exceptions do arise.

Yep. And that was, you know, PPP, ERC, you know, those were huge exceptions, and because, you know, over time we’ve always shown that we had our teams back, they were ready to do whatever it took to help our clients through a major crisis.

Yep, and I think that you guys had already, you know, built up some of that goodwill in that with your employees. Talk to me about one of the dynamics that exists within your firm: You’ve gone from, again, a 60-year-old, stereotypical, everybody in a brick and mortar location, we can easily, and I, tongue in cheek, I mean, it’s not an overnight easy thing to do, but we can easily build culture when people are sitting within proximity to each other and passing each other in the hallway, to now having a firm that is 50 percent deployed remotely. How do you maintain that culture? How do you build that culture? And how do you ensure that the connective tissue is still there to hold people together?

Yeah, it’s—and I will tell you that is not a simple thing to do, and we’re always working on it. But we’re doing a lot of things that I think are right because what we do is we see engagement and participation from our people that, you know, some people have been to our office once and met people once in person. Some of the things we do is we will offer to fly somebody here to the office to meet people when they first start with us, so they can get to know everybody on a more personal level. We do have company events that are still local that we will help people commute to get here for, especially those local remote employees, where they work within 100 miles of the firm. We will try to intentionally make sure that if we’re doing something that they can still come.

But from a virtual dynamic, we still do our all-hands, everybody’s on Teams. We treat our firm a lot like it’s a fully remote firm, so that way everybody does feel integrated. Through our Teams messaging boards, we do a lot of posting and sharing of what you’re doing, what you’re working on, what you’ve accomplished. Today is our Halloween party, and we have a chili cook-off and costume contests and all these things, and we’re not just encouraging people, and we have Spirit Week all week, we’re not just encouraging people to come to the office like that—show us your picture that you’re doing that at home. Spring cleaning of the office day. Hey, you know, post your picture on the Teams board and we’re going to pick a winner based on the picture, not somebody physically in the brick and mortar, to do so. So we’ve done everything to make it very inclusive for those that are remote to participate in everything we do, that’s actually possible.

One of the things I think that’s pretty interesting that you guys do is, I guess there are really two things that I want to touch on. One, when you guys do things locally, I think that when I was there meeting with you guys, you were talking about a day that everybody on the team in Antioch went to the zoo, and funds were disbursed to the people that were remote saying, “Hey, go to the zoo in your local town or whatever it is that you want to do.” That’s one thing.

Yeah.

The second thing that I think is pretty interesting, again, that there’s been instances over the last year or two where you or Clay, or even other employees, have been traveling through an area where you have remote employees, not work-related travel, just traveling, and you’ve intentionally made it a point to reach out and say, “Hey, let’s grab lunch. Let’s grab dinner. Let’s get a couple, you know, let’s spend some time together.” Those are two things I think that go a long way to, again, building that connective tissue and it goes back to intentionality. Is that something that you guys talk about and focus on and say hey, we need to make sure we do these things?

Yeah, I think some of that started with just happenstance of there’s always been a lot of opportunity to that. It’s always funny how sometimes things just fall into place. But I think one of the first times we did it, we’re driving, we saw the sign for Paducah, Kentucky, which is where one of our remote employees lived, and we said, “We could make a 30-minute detour, stay there instead of going somewhere else, and have breakfast with an employee.” We reached out, we ended up getting together, and that was great. And then all of a sudden, you see these opportunities line up, and it’s like, you know, if the opportunity is there, and we can make a human connection with one of our people that we don’t get the opportunity to do on a day-to-day basis, it feels so great to be able to do that for us and for, you know, I hope for them as well.

Well, I can tell you again: Speaking not only to you guys about, “Hey, these are some things that we’ve done,” but then turning around and speaking to your people about some of the things that you’ve done, you know, especially the Zoo day, it was, again, it’s a little bit of a statement from you guys that you’re important, but it is a very loud statement on the other side of the desk to your people saying, “Hey, we’re intentional about this. You are important to us. You mean something to us.”

Absolutely. And what’s interesting is that none of those things actually came to my mind when you asked about that, which shows almost that we’ve already ingrained that into our thinking and how we just operate, right? It’s just inherent for us to say, how can we include somebody that it’s not convenient for and make it happen? So that actually, it’s kind of cool that that came up the way it did.

Yeah, it’s—and again, I think you and I have talked about this: My wife and I do marriage coaching, marriage mentoring, and it’s always interesting how, when we talk to spouses about things that their spouse does, that just sends them over the edge positively, not negatively. So many times one spouse will say, “Well, he’s done this for me,” and the husband sits there and goes, “Really? That’s important to you?” He gets up every morning when he’s got to go to his office. He makes coffee for me every morning even though I sleep in. “Really? That really is important to you?”

That’s just ingrained, right?

Yeah, it’s just what you do, but you don’t realize how much of an impact it makes and how big of a statement it is to your people that they sent me gift cards to go to the zoo on the day that they were going to the zoo. So, yeah, again, I think little things like that go a long way.

Yeah. That was cool.

Talk to me about, you know, what you guys look at when you look at hiring, what are some of the qualities that you look for? I know that, again, you guys, just like everybody else over the last 24 months, have made some hiring decisions that you look back on and go, “You know what? Probably shouldn’t have pulled the trigger on that. We probably shouldn’t have brought that person on,” but business has been growing so fast for everybody. I don’t think there’s a firm out there that hasn’t made hiring decisions they look back on and go, “Man, that was not the smartest thing we did.”

What have you guys learned over the last 24-36 months of, we know what works in this place. And here’s the type of person that fits in our culture. What have you guys learned over the last two years, three years through the growth that you’ve had, some of the turnovers you’ve had, but also some of the successes and wins you’ve had as well?

So obviously, we talked a lot about how the firm has evolved over the short term, which makes it an ideal fit for some and maybe not an ideal fit for others, depending on what their goals and what their priorities are. So we’ve experienced some turnover and pain from that. And then we’ve grown pretty rapidly over the last several years, and what we found is if we actually kind of go back to our core, we read a book called The Ideal Team Player, and inside that book, they have three things that they look out for, which is somebody that’s hungry, that’s humble, and that’s smart.

So smart just means you can get the job done. Doesn’t mean you have to be a rocket scientist to do it, and are you people smart? While you can be a great technician, are you able to make relationships with your staff so that way you can collaborate and work together, and be productive together?

Solid emotional intelligence.

Absolutely. That’s almost more important in our eyes than technical abilities, right? I think we—everybody can be trained, technically, to get the work done. You just have to have capacity to do it. And really that goes into the hungry side, right? Are you hungry enough to learn how to do it? And that’s really what we’re looking for is not necessarily somebody that has to have this massive resume and this huge skill array, but somebody that wants to learn, has that desire to learn and progress and grow, because we’re going to continue to change and evolve as a firm and grow in a certain way. And if someone says, “Hey, I’ve been doing it my way my whole career, and this is the only way I want to do it,” they’re probably not the right fit for us. So somebody that really has that growth mindset, that’s super important for us.

I’ve got to recite this—hungry, humble, it’s where I went out of order reading these through. Humble is the last one, right? That is, you know, willing to roll up your sleeves, do things when crisis mode hits, not being too strong to say, “Hey, I’m going to go help somebody with maybe a task you feel like is below your normal operating skill set. You know, I want to just help all the other people here at the firm so we can all live a better life.”

Yep. The entire Lencioni mindset of hungry, humble, and smart is something that I completely buy into because again, like you said, and it’s one of the things that we talk to clients a lot about, there are things from a technical standpoint, yes, you’ve got to have a baseline knowledge and understanding of certain things at certain levels. The person that we’re bringing in at an associate level, we don’t need them to be where we are, you know, looking for somebody at a manager level, so to speak. But at the end of the day, there are things we can teach. If they have the component, if they’re smart, and like you said, emotionally intelligent, if they have the desire to learn, if they’re hungry, if those things are present, we can teach that person those things, but there are certain characteristics that that person just is going to bring with them or they’re not going to bring with them. And being able to dig into those things and find those things is critical to be able to build the kind of team that you guys are talking about.

And it’s obvious that you guys have been able to do that because when you look at the overall team, again, I think when I was there and we were looking at these numbers, you’ve got the average tenure in your team, prior to this year when you did a lot of hiring, average tenure in the team was right at eight years. And when you look at your leadership team, average tenure of 14 years. So you guys have done a lot of things right, and you’re obviously to have an environment, a built-in environment that people want to be a part of. What would you say are the one or two biggest critical factors that you guys focus on when you’re building that team, when you’re building that culture, that you say, “Hey, these are things we got to hold on to, to maintain this type of stability in our staff?”

I think our flexibility or even adaptability to our individual team’s needs. I think that’s one of the big things. We aren’t forcing people into a box, right? We’re going to give them the systems and the processes, the technologies, to go execute, but I’m not saying I need your butt in the seat from 8 to 5. If you got to, you know, if there’s other priorities, you know, I want to make sure that you can fulfill all those other parts of your life. And, you know, hey, let’s just make sure we understand how we’re still going to get the work done and make it work best for you. I don’t want you to miss your kid’s events because you need to get one more tax return out. That’s fine. We can pick up and get that tax return done at a certain point in time. So we want to really foster that open communication around things and not say, “Hey, miss out on everything else that you have going on just to get some more work done.”

And again, it goes all the way back to creating the remote environment. You know, we go back to, I think, the early 2000s when we created the first remote environment for an employee. How can we make it work? Because we appreciate you so much as a member of this team that we’re going to do whatever we need to make sure you can live your life while also still being a part of the team.

Yep. There was one of your employees that I spoke with that I think kind of painted that picture perfectly when she went to the hospital for a checkup, when she was pregnant and found out, hey, I’m going to be in the hospital for the last six weeks of my pregnancy. I’m not going to be able to work. It’s right in the middle of tax season, and it was her that made the call, not you guys. It was her that made the call more from a sanity perspective than anything else. But it was, “Hey, I can’t sit in this hospital and twiddle my thumbs for six weeks, I have got to work. What do we need to do?” And the reaction from leadership was, “We’re on it. We’ll figure it out,” and within 24 hours, you guys had a remote work setup at the hospital for her with a mindset of do what you can. If it’s two hours, it’s two hours—if it’s eight hours, it’s eight hours.

And, you know, in her words, “That has never affected my growth opportunity with the firm, it never affected my compensation with the firm. It never affected anything from a present, you know, current situation or future situation with the firm at all. They saw a need, they jumped on it. They did what I needed done. It’s been great ever since then.” And I think that’s just a testament to the leadership team and the way that you guys approach taking care of your people.

Absolutely. And what really validates that for me is I had a very similar situation. My son was born 10 weeks early and I worked tax season through the NICU, and while I got work done, my team definitely stepped up around and did everything they could to support me through that, and, you know, that’s what good teams do for each other.

Absolutely, because there’s going to be days that somebody is putting forth an all-star performance, and then there are days where that person can’t hold on to the ball to save their life for whatever reason, and the only thing that makes us still win is the team steps up.

Absolutely. We’re all human, right? We can’t all operate at the same exact wavelength, every single day.

No, we absolutely can’t. So, talk to me about the future. What’s the vision look like from a growth perspective, from a people perspective? Where do you guys see the firm, you know, with the changes you’ve made, the success you’ve had, where do you see the firm 12-24 months from now?

We still see a lot of growth happening. That does not seem to slow down. And that’s a testament to our team, because we’re in a business that requires you to grow by referrals and reputation. So we’re growing very organically at a significant pace. That means everybody’s servicing their clients at an exceptional rate. We see that continuing to happen. So we’re going to continue to grow and it’s going to be still national growth. It’s going to be still remote work. We’re going to look to bring in any type of AI and automation that we can to those day-to-day tasks, because we want to give everybody the opportunity to elevate their skill set. And then we’re going to continue to hire people and not be bound by the brick and mortar of our office in Antioch, Illinois. So we’re looking to hire across the country and especially bringing in different skill sets and perspectives that maybe come from those different pockets within the country.

It’s definitely becoming an issue where you’ve got to broaden your horizons. It’s one thing from a talent perspective if you’re sitting in Chicago or Milwaukee or Dallas or Nashville, that’s one thing, but not only you guys, but other clients that we work with that are sitting in second tier, third tier marketplaces where you’ve got a population pool of less than 20, 25,000, you’re technically not a suburb. You’re, what, a good hour, hour and a half to Chicago? A good 45 minutes to an hour to Milwaukee?

Exactly.

So it’s the necessity to look outside of those boundaries, you know, still, ideally, in a perfect world, trying to find people in a 200, 300 mile radius, so when we do have people in the office, it’s a, you know, hop in the car, drive here, versus having to get on a plane, but that doesn’t mean that if that best person with that hungry, humble, smart mentality is sitting in, you know, Washington, D.C., Baltimore, Maryland, Pittsburgh, Pennsylvania, that they’re not an option. So I applaud you guys for kind of expanding your horizons to look at those things.

So you guys have done a lot of things to separate yourselves from larger firms that are still approaching things with a business-as-usual mindset. If there are folks out there that want to learn more about your firm, whether they’re owners that are trying to figure it out, “Hey, how do I flip this switch? I’m a 10, 20, 30 year old legacy firm,” for lack of a better way to put it, “and I’ve been selling in my head that I can’t do this because of that. Now, these guys have been doing it for 60 years. Somehow they figured it out.” If it’s somebody like this, trying to figure out how do I do this? Or if it’s somebody that’s listening to the podcast, that’s sitting in, you know, Phoenix, Arizona, that’s thinking, “Man, I wish I could find a remote opportunity.” What’s the best way for people to get in touch with you, learn more about your firm, learn more about you, that kind of thing?

So our website is probably the best place. We put everything that we can on our website so somebody can learn about us at their leisure, right? That’s how we operate now in today’s society is we’re going to go on someone’s website and do as much research as possible. So KaizenCPAs.com, great place. You can find us on LinkedIn. You can find me on LinkedIn. I share a ton of content on LinkedIn, Facebook, all the social media platforms. Google Kaizen CPAs, we should be the first ones to pop up. If [we aren’t], let me know.

You should be the one that comes up the quickest, right?

Absolutely.

Again, I applaud you guys for what you guys have done, for what you continue to do—great job.

Thanks John, I appreciate that.

And for those listening, thanks for taking the time out of your day to learn a little bit about Kaizen CPAs, spend a little bit of time with us, and learn about what firms are doing to create as much of a new path forward for CPA firms and for CPA professionals. And if you’ve enjoyed what you’ve heard today, give us a like or leave a comment down below, subscribe on the platform of your choosing so that you don’t miss any of the future episodes that we have coming up: Conversations with leaders just like Eric that’ll give you a little bit of a taste of what CPA Life could look like in an evolving and growing firm. Until next time.

We hope you enjoyed today’s episode. Be sure to subscribe on your favorite podcasting app, leave a five star rating and visit our website for links and show notes at CPALifePodcast.com. We’ll see you next time on CPA Life.

From Tradition to Transformation: Catalyzing Growth with Eric Joern

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