Accountants Move from Hindsight to Foresight: The OBK Story

Along with my co-host and colleague Ed Kless, I was honored to interview Paul Kennedy, FCA, of O'Byrne and Kennedy, a Chartered Accounting firm outside of London.

You can listen to the entire interview on The Soul of Enterprise: Business in the Knowledge Economy, here.

Paul explains his history of meeting Paul O’Byrne, and how they worked in the same firm, before going out on their own on October 1, 1987. Sadly, Paul O'Byrne passed away in November 2008.

He then explains the firm’s pivot to Business Advisory services and away from compliance services. Mostly this happened because Paul O’Byrne was “bored” with traditional accounting services.

In 1997, they attended the Results Accountants’ Boot Camp, conducted by Paul Dunn and Ric Payne. They realized they had too many customers—around 500. They first fired their largest (audit) customer.

They ended up firing over 450 customers over 2-3 years, freeing up capacity to move into more business advisory services. They developed a “core competency in firing customers. They did it professionally, keeping their reputation in the community intact.

Firing a customer is similar to breaking up: “It’s not you, it’s me, I’ve changed.” They also found them a replacement firm to make the landing softer. They also ended up selling some customers to another firm.

They also lost some team members due to this pivot. Today, the firm has 8 team members.

They developed many consulting protocols and products, and developed a rigorous customer selection criteria. Paul O’Byrne was no longer bored.

Then Paul O'Byrne met me in March 2000. They thought I was crazy at first, especially Paul O’Byrne who continuously debated with me for three years about the concept of eliminating timesheets.

The firm did immediately implement Value Pricing, and Paul Kennedy says the firm became the “Ron Baker laboratory.” The firm didn’t eliminate timesheets until July 1, 2003.

In fact, Paul Kennedy wrote what Ron considers is one of the most powerful arguments for eliminating timesheets, in his essay on timesheets. You can read the entire essay here. 

Paul discusses the effect no timesheets has had on his team, and how the firm works. You become obsessed with value. Also, their website says OBK is a “teaching and learning organization.” 

What makes OBK one of the most innovative accounting firms on the planet?

The OBK MBA. The firm’s internal University offers an MBA to customers and potential customers. This is an intense program, teaching strategy, finance, positioning, pricing, and other facets of executive education, including each student preparing and presenting a case study. Check out the video on the MBA at their website.

VivaTrak. This is the firm’s internal project management program, which they developed internally. It translates the fixed price agreement into milestones, tracking deadlines to the customer, and value earned based on those milestones.

After Action Reviews. The firm diligently does AARs on all work, and Paul says AARs are one of the most transformative processes they have ever implemented. They have also introduced AARs to customers. AARs drive out fear, and develops a culture where people aren’t afraid to admit errors.

Paul points out that AARs can’t just be negative. You have to focus on what went well so you can replicate it.

Renewing Your Vows. “We don’t own these people.” OBK puts every single customer at risk at the end of each contract period. They have a conversation where the first item on the agenda is if they should continue the relationship. Sometimes, the firm wants out; other times, customers want out.

OBK doesn’t want people to stay from apathy. They only want to work with people who they can add tremendous value to. The firm’s success is a direct by-product of how it creates value for other people. Here are some of the questions they ask:

•             How are we doing?
•             How is this working for you?
•             Are you getting value from our work?
•             What can we do to create more value?
•             Do you still think we are the right firm for you?

Paul wants his entire team to think they are on the last chance with every customer. This enables them to perform at the highest level, to exceed customer expectations and constantly deliver more value (it’s like a value guarantee on steroids).

This scares most firms to death!

Last Questions for Paul

What’s the number one issue facing the profession?

Lack of focus. We try to be all things to all people, and we need to narrow our focus. We can’t be all things to all people. Paul quotes Zig Ziglar: “You need to move from being a wondering generality to becoming a meaningful specific.” Figure out what you’re good at and stick with it.

What’s your advice to any firm out there that’s thinking about making some of the transitions you have?

Take a holistic view of your business. Become focused. Saying no, turning work away. Be comfortable with other accounting firms doing work for your customers. And get rid of your timesheets, as it detracts focus from what your customers care about.