Firm Product Management Is the Way to the Future

The Provider and customer have to be aligned.

By Jody Padar

From Success to Significance: The Radical CPA Guide

What is your firm’s purpose?

Let’s go back to the idea of innovation, or what I like to describe as the application of innovation and business model transformation.

We’re not just managing change anymore. Change management is becoming obsolete – New Firms know they must be nimbler than just strategizing around any sort of targeted change. Managing change was fine five years ago, but trust me when I say we are beyond that.

What I’ve realized is that firm management is evolving into product management. Now hear me out, before you think I’m throwing service out the window.

Product management is what technology companies do when they create new technology. It’s the organizational lifecycle dealing with the planning, the forecasting, the production and the marketing of a product or products in all its stages.

If you look at this definition from Wikipedia, product management “integrates people, data, process and business systems.” Isn’t that what we do as CPAs?

I mean, think about it. Don’t we integrate people, data, process and business systems? Don’t we do this to provide the best service possible to our customers?

It’s a brain change. We haven’t before thought of ourselves as a product. We always think of ourselves as selling service hours, but if you move to fixed pricing, or a value-pricing model, we’re in a whole different ballgame. We’re selling a product now and really a result or even transformation. It’s like what Ron Baker of VeraSage Institute said, “The customers become the product in a transformation.”

The question becomes, how are we going to keep that product innovative and cutting-edge so that we’re not just selling service hours? Because, guess what? We shouldn’t be thinking of ourselves as selling service hours anymore.

In a traditional CPA firm, most deals are structured on a combination of time and scope. As the scope of requirements increases, so does the time needed to deliver them, so the price goes up. In other words, the more work the customer wants done, the more they’ll have to pay. In this situation, the customer is incentivized to ask for less, while the firm is incentivized to find more work for more billing.

A productized service is organized differently. It’s designed to align the incentives of both the provider and the customer with one common purpose: to produce desirable results for the customer.

Case Study: Launching a New Product Line at New Vision, New Vision Wealth Management

The best way to explain how this works is to talk about a new product launch at my firm. We are in the process of launching wealth management services, and we are doing it via a product management model.

How did we decide we wanted to do this? It was the next natural step.

Our customers were asking us about financial planning. I also saw some of our younger business owners exit their companies and watched their wealth leave our firm because we were no longer able to meet their needs.

I decided it was time to get licensed. Not to mention, a shift of generational wealth is starting to occur as the baby boomers are dying and my customer base is primed to receive inheritances.

I also believe that complete financial planning should be in a firm. It just makes sense to serve your customer from a holistic point of view. If you look at any of the bigger firms, they offer wealth management as it is a complementary offering.

Perhaps even most importantly, fintech helps us provide services that our cloud-based customers expect. We are a technology-driven firm and now, thanks to the latest in financial technology, we can meet them where they are online.

Once again, traditional CPA financial planning firm owners are not meeting the needs of the next generation of customers, when they expect in-person face-to-face meetings.

Now, I know compliance is tough and it’s not as easy to transact using the Internet, but I’ve trailblazed before. Why shouldn’t CPA financial planners be able to serve their customers in the same fintech-driven way?

Where did we start?

We decided to align with 1st Global, which only serves CPA firm owners. They are our RIA and our broker dealer.

Why 1st Global?

After doing research and asking other firms we knew, we did not want to be an in-house RIA. We also knew we wanted to have a complete offering as we got more involved in the financial planning space.

Also, I challenged their leadership team about where I wanted to be from a fintech perspective, and they were open to be challenged. It started with compliance doing a social media audit of me. Talk about walking into an unusual relationship!

We created a business plan using Aha!. We defined what we would sell. This is a big deal because we didn’t just say we would sell everything 1st Global offers. We defined a handful of products that we believed would complement our current customers’ needs. We don’t want to be everything to everybody, and are comfortable with defining who we want to serve and how we will serve them. That means we may turn down business because it does not fit into our product line offering.

The slide above is a one-page overview of what we are selling and who we are selling to. It can keep our whole firm engaged with a simple explanation of our new product line goals. This is especially helpful for the members of our team who are not directly involved in the initiative.