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Episode 19:

Focusing on Purpose over Profits

John Sensiba


On Episode 19 of The Upstream Leader, Jeremy Clopton speaks with John Sensiba, Managing Partner of Sensiba San Filippo LLP. John discusses how his firm transitioned to a purpose driven, client-centric model through changes in compensation structure and B Corp certification. He emphasizes the impact purpose can have on retention and recruiting and offers advice to leaders seeking to reorient their workplaces’ priorities.

About the Guest

With over 30 years of experience in the active practice of public accounting, John now focuses on working with his partners and colleagues to set the vision and strategy of Sensiba San Filippo LLP. John is focused on directing the firm’s strategic plan and market growth, providing oversight on all executive and operational decisions, and leading the firm’s professionals in the delivery of superior client service – helping the communities they serve, the clients they serve, and each other.

John is a nationally recognized industry expert and is often leveraged by leading media sources to speak on Economic and Tax matters facing individuals and businesses, including Family Wealth Report, Smart Business Magazine, and the Silicon Valley Business Journal. In addition, he serves as an advisor to other Professional Services firms, consulting with them on best practices related to management strategies, partner management and compensation structures, and retirement/succession planning.  He is often invited to be a speaker at Bay Area events and in addition hosts several annual exclusive C-level officer roundtable discussions for leading Bay Area business executives on industry-related matters and hot topics. 

John was recognized and awarded the Dr. Martin Luther King, Jr. Legacy Award. In addition, he was selected as one of the Managing Partner Elite by Accounting Today. He was chosen by the leading online community, Glass Hammer, as one of the Men Who Get It for 2012, and nominated in 2013 for the E&Y Entrepreneur of the Year program.  In 2015, he was awarded the prestigious Mayor’s Award by the City of Pleasanton and was named Pleasanton’s Man of the Year for his role as Board Chair during ValleyCare Health Systems affiliation with Stanford Health Care.

John received his bachelor’s degree in accounting from San Jose State University.  As a licensed CPA in California, he is a member of the American Institute of Certified Public Accountants and the California Society of Certified Public Accountants.   Outside of work, John is highly active in the community, serving as a Board Member for Stanford Health Care – Valley Care, a founding member and current Chair of the Pleasanton Chamber of Commerce’s Business and Community Political Action Committee, a member of the Rotary Club of Pleasanton, and a continuing instructor in the Leadership Pleasanton program. He is a former: Chairman of the Innovation Tri-Valley Leadership Group, Board Chairman for the Pleasanton Chamber of Commerce, board member of the Las Positas College Foundation, member of the Presidential Advisory Council for Las Positas College, member of the Pleasanton Unified School District Excellence Committee, member of the PUSD Budget Advisory Committee and on the Board of Advisors for Sunflower Hill.  He actively volunteers for his church and other community groups.  He enjoys hiking, fishing, motorcycling, and spending time with his wife and family.

Highlights / Transcript

Welcome to The Upstream Leader podcast. I’m joined today with John Sensiba, the Managing Partner of Sensiba San Filippo out in California, and today, we’re going to be talking about purpose over profit, which I recognize in our profession isn’t always the easiest conversation to have. We do talk a lot about realization and utilization and other metrics like that in the profession. Today, we’re going to be taking a slightly different approach. And we’re going to be talking about running a firm and being a leader that focuses on something bigger than profit. So welcome to The Upstream Leader, John. Glad to have you. 

Thanks, Jeremy. Glad to be here.

All right. Before we get into the purpose over profit conversation, there’s a number of different things that I want to talk to you about. On that topic, John, I’d love to know, how did you become the leader that you are today? What’s that journey?

Oh, good question. I suppose like anybody who’s my age, I’m 58 now, you’ve been in the business for 30, 30 plus years, I think I’m 35 years out of college. And there’s all kinds of different experiences that I had—some, you know, some good and some not great. And you learn from all of those things, you learn, sometimes what you really want to try and be and sometimes you learn the things that you definitely don’t want to be in terms of leadership. 

But there wasn’t a lot of money spent on formal training. When I first got into the profession, as a matter of fact, there still isn’t as much money spent on formal leadership training in our profession as I’d like to see. But there was virtually none. There was no discussion of it in business school, there was no discussion of it in firms, at least not the firms that I was exposed to early in my career. 

So I never really made a conscious decision to pursue a leadership role in my firm or any other organization. But I did early on. My son was young, I’ve got three kids, my son’s the oldest, my older brother was coaching soccer. I had never coached anything before. And he said, Hey, do you want to, you want to help me because youth sports are always desperate for coaches. And so I said, Okay, so it’s my older brother, it’s not too intimidating, right, my son, and one of his sons were the same age. So I coached and then one of my daughters wanted to play and there was the typical shortage of coaches. So I volunteered to coach with another parent, a woman, and she was actually a very good soccer player, but couldn’t commit to being the head coach. So I had to speak in front of a bunch of parents and you know, do the awards at the end of the year, all the stuff that you do, and in youth sports, and I think that’s really where I started being more comfortable with public speaking, because it was nauseating, the concept of speaking in public really made me almost physically ill. So it took a long time for me to be comfortable with that. And I think that was the start. 

After that, I sought out opportunities to be exposed to other leaders, because there was no formal or informal leadership training in the firm that I was in. I joined the Chamber of Commerce board for that community where I live, and became chairman of the board of the Chamber of Commerce and all great education. And I’ve done that, I continue to do that, to join organizations and groups that, first of all, I’ve got to be passionate about their mission, of course, but the ancillary benefits of the informal leadership training have been really helpful for me. 

And then, you know, don’t tell Sam this, I’m sure he won’t listen to our conversation. But you know, Sam Allred and Tim Bartz, the founders of your organization, I’ve been involved with them since the 1990s. Real good, solid fundamentals. There’s a reason why you chose to be there, Jeremy, just salt of the earth people and humble leadership and I aspire to humble leadership, my ego is bigger than it deserves to be. But when I see people like Sam and Tim, and their skill sets and their humility, it’s really a role model for me. And there are other people like that in the profession, but they’ve been really impactful to me and my leadership style. So that’s a little bit about how I’ve got where I am, and hopefully where I am is not the best I’m ever going to be. I continue to try and learn and grow every day, of course.

Yeah, that tends to be a very common theme that I hear with leaders in our profession, especially the great leaders, is it’s not about, I’m the best leader today that I could possibly be. But I’m a better leader than yesterday and tomorrow I’ll be a better leader than today. And how can you go about becoming that better leader, and what you’ve said is it sounds like you surrounded yourself with individuals that you felt were good or great leaders so that you could learn from them. It wasn’t like you said formal training. It was experiential training and observation. Is that fair?

Yeah, absolutely fair. And I gotta tell you this getting a little bit better everyday thing—by the time I’m 400, Jeremy, I am going to be a great leader, I promise. Just got to live long enough.

There you go. There you go. John, I think most would say that you’re a great leader as it is, and one that’s always committed to getting better. I appreciate that humility, though. You talked about serving on boards. And I know that you’re on a number of organizations, boards, and active in a number of organizations, even today. It may have started with the Chamber of Commerce. But you’ve continued that, as you mentioned, and you talked about being passionate about their mission. 

And I want to shift gears a little bit. But I want to build on that theme of passion about the mission. Because Sensiba San Filippo is a firm that really takes that to heart, the whole concept about being passionate about a mission, helping clients, helping the community, helping each other within the firm. And I’m going to tackle the profit side of this a little bit here while we talk about it. But when I think about firms in our profession, there are plenty that still do the book of business model. And it’s all about, yes, you should be passionate, but really, at the end of the day, it’s how does it benefit the bottom line, and that book of business, and your firm on your website, explicitly states, you don’t pay your partners based on the book of business. 

I don’t think I’ve ever seen another firm, and maybe I’m just missing some websites, but John, I don’t know any other firms that explicitly state how they do or don’t pay their partners. I’d love to learn a little bit more how that decision came about. But as a leader, how you were able to make this transition to value based evaluations of success. Because you lay out your values, you say, this is how we’re going to be successful subscribing to these values. It’s not a book of business. I’m sure passion plays a role there. But it’s definitely all about the purpose. Is that fair?

Yeah, it is fair. And I don’t think a lot of firms have completely made that shift yet. But I’m so encouraged, Jeremy, about other firms in our profession in their pursuit. And it’s not an easy thing. I think we had some advantages when we made this decision. And it was really led by the managing partner that preceded me and a group of us that were on our executive committee. We were and still are a pretty small firm. And that certainly makes it easier, right? A smaller group of people can build trust, I think, faster than really large groups. 

But I think the biggest assistance we got was the recession in 2008, 2009. That was the time we were making the change. And when there’s a group of people that are banded together to try and survive something as dramatic as that economic downturn, it’s easier to say, let’s follow this path. Because people are uncertain. And you know, they’re willing to try new things to try and get out of their current situation. So that was, I wouldn’t recommend that to people. I took over as Managing Partner in May of 2008. And of course, October of that year was pretty ugly for the economy and there was a fairly long recovery. That definitely helped. 

It is odd to tell people how you pay your partners. So the first reaction I get from a lot of people is, I don’t care, right? Like why would you ever talk about, you know, you’re a CPA firm? What can you do for me? Can you save me taxes? Can you get my financial statements done? Can you do the consulting work that I need you to do? The reason I think it’s important, and most people agree with me, after we chat a little bit, is that people are motivated by rewards. 

And if you reward behavior, that is book of business behavior, for instance, that—I’m not gonna say that firms that pay that way are anything other than great firms; they are. But not because of the way they pay their partners—in spite of the way that they pay their partners. Because if you pay people to amass clients themselves, if you pay people to follow these fairly selfish behaviors, then you’re going to get some of that behavior. And I think it’s important for people to know that we don’t pay ourselves that way. 

So if you come to me and say, John, I’d really, you know, think I want to be a client of your firm. And I’ve got this manufacturing business. I want to work with somebody who’s super passionate about manufacturing. Well, if I get paid based on my book of business, I might say, Jeremy, I’m your guy, you came to the right place, you and I are going to work together. When in reality, maybe I’m passionate about venture capital. But I’m not going to get paid if I don’t have a bigger book of business. So there’s that whether or not people would ever do that. I think people in our profession are honorable. But there’s a motivation, a monetary motivation to do that. And we took that away. 

So if you told me that you wanted to work with us, and you had a manufacturing company, I couldn’t wait to introduce you to my partner Karen Burns, who’s nationally recognized in the manufacturing industry. As a CPA who’s passionate about that space, she started organizations that cater to CEOs of manufacturing companies here in Northern California, she speaks nationally on the topic, she belongs to every association you can think of because she loves it. Now, would you rather work with somebody like that than somebody who’s taken you on because, really, it’s gonna help their bottom line personally? And we asked ourselves that question. And our answer was, yeah, I want to work with a person who’s excited about my space. 

So we made that decision. But that meant that we had to compensate partners in a different way, you know, a balanced scorecard, which I think a lot of people use. I guess the difference is how much you weight book of business and the balanced scorecard. We do weight a little bit, not very much to, you know, manage the business, less than 10% of your compensation, honestly, is associated with that. Growth is a big deal. So if you help the firm grow, whether or not you serve that business, then growth is significant. And most significant of all is, are you a good citizen, a good citizen within the firm and a good citizen within our communities? Do you live our values, not because we think our values are perfect. They’re right for us, they may not be right for other firms. But if we have people in our organization that are behaving inconsistently with those stated values, then that eats away at our integrity and our ability to build the culture that we want. And young people who come to work for us say, Well, I saw your website. But now I understand the way the firm really is, right? I’m seeing it, you’re tolerating it, you’re paying people a little bit less, maybe because they’re mean, but you’re letting them be mean. And I think in our organization, you don’t get a choice about being mean, we can’t pay you little enough to allow you to stay in the organization if you don’t live into our culture. 

And you know, all credit to the partners that were here at the time, many of them are gone. But they took a leap. They used to be able to calculate their compensation by dropping numbers into a spreadsheet, right? There was no subjectivity at all. And now it is, I think they refer to it as a black box. We create clarity by meeting regularly with our partners, and setting goals and telling them upfront, if we hit our budgeted net revenue, I would expect your compensation to be this, if you achieve all these goals, and we meet regularly throughout the year. So I don’t think at the end of the year, anybody says they’re completely shocked by their compensation, it’s pretty well laid out. But you can’t calculate it. You can’t calculate it in a spreadsheet, there’s a lot of subjectivity to it. The courage of those partners to take that leap is really what allowed us to do what we’re doing now.

Yeah, and that was a good 12, 13 years ago, it sounds like, which was kind of before this was even, I hate to say it’s before it was really a thing, but 12, 13 years ago, you didn’t hear very many firms talking about that subjectivity. As you said, our profession is definitely progressing. More and more firms are talking about that subjectivity, how do we move away from just pure calculations, and I know my background in the forensic accounting space, it’s amazing what money will get people to do. And it doesn’t mean that it will always make them commit fraud. But as you said, if my compensation is going to be based on my book of business, I am now incentivized to focus on me, I’m not incentivized to focus on the firm or the clients or the community. Whether that’s the intent, and I don’t know that that’s ever been the intent of anyone in an accounting firm. It is what it creates. 

So you mentioned being a good citizen and following the firm’s values. And I know you have a number of those listed on your website, you know, being approachable, innovative, passionate, you know, having integrity, reputable philanthropists, diverse, respected, all amazing values. As you said, they’re great for you, they may not be great for everybody. Not exactly tangible in a way that you quantify. So how were you able as a leader, and again, you mentioned you were in a time of crisis or survival. It’s amazing how much easier it is to change when you have no other choice. 

But as you think about it, from a leader standpoint, and maybe there’s a leader listening right now thinking, hey, you know, they’re a managing partner or a partner, or maybe they’re an up and coming leader, and they’re thinking, our firm’s struggling with us right now, we just can’t quite get over that hurdle. How would you recommend a leader go about making that transition? It’s not overnight, but how do you move away from, let’s make it easy and objective to let’s really focus in on our values and the behaviors that we want and tie compensation to that? Where would they start?

Where we started, and I think it works for most folks. I’ve talked to some firms about this topic, Jeremy, across the country, people that are trying to move their firm away from a book of business. Where it started for us and where I asked other firms to focus is what would you want if you were a client? Who would you want to work with? And we asked ourselves that question. 

In our answer was, well, I want to work with somebody who is excited about my business, excited about the industry that I’m in. And I want to work with somebody who is focused on things that impact my industry. So whether it’s environmental regulations, or more on point, the Senate Finance Committee, considering tax legislation that could impact my ability to, you know, to continue to raise capital and grow, or if it’s the FASB contemplating a change in accounting method for long term contracts that might impact my financial statements, and then my ability to raise capital, either through through debt or equity. 

And we asked ourselves those questions, and we answered them in that way, we said, we want to work for somebody who’s passionate about what we do. So that means you have to be focused on a specific industry, we want to work with people who are national experts, people who are focused on, maybe even international, internationally, on my business, and the things that are going to impact it. So we tried to become those things, because I think once you, once you have an understanding of what you would want, it’s almost like a moral imperative that you have to become that right, because operating in any other way just seems to lack integrity. 

So to encourage that kind of behavior, we had to get away from the book of business, because, like you said, it doesn’t mean that people are going to behave that way. But you create an environment that encourages it, really, encourages sharp elbows, you know, between partners like, Jeremy, that banker called, but I took the call and you know, that’s my client. You don’t want to encourage that kind of behavior. So you have to change your compensation model to reward people for saying, guess what I’m manufacturing. So when I get that referral for a construction company, I’m going to refer it to my partner who focuses on that. And I’m not going to take that client, we’re trying to take that client on myself. 

And the ancillary benefits are, you get to focus your education, right, there’s so much continuing education you could take as a CPA. You get to focus it on your profession, the staff that choose to work in that industry work for somebody who’s passionate about that industry, rather than somebody who’s just serving that client to make a dollar. When you start talking to firms about this client centric view of the professional that they want to work with, whether it’s a CPA or not, any professional, right? You go to the doctor, you don’t want to go to a doctor that says, you know, really I’m an orthopedist. But it’s kind of slow this week, so that brain surgery, I’m gonna go ahead and knock that out for you. It doesn’t sound very appealing. And the same thing is true for other professionals like CPAs. 

So once you realize that you should and you’re obligated to take that client centric view, then everything has to line up with developing that within your firm. And that means compensation and retirement. So if you pay somebody based on their book of business in retirement, which a lot of firms do, then I’m going to build that book so that when I leave, you’re buying me out on a really big number. So all that stuff has to change in order to really be able to serve clients the way that you’d like to be served if you’re a client.

Yeah, that’s so good, John, and client centric is such an important mindset to take. There’s a lot of discussion in the industry right now about that historian versus advisory mindset. And I think when you’re client centric, it’s so much easier to become an advisor, to have that advisory mindset. I strongly believe that because when you’re thinking about the client, and how can you best help the client, you don’t worry about what your outputs are, you’re just all worried about their outcomes. And it really allows you to do that in the model that you all have taken has done that. 

When you think about client centric, that definitely drives purpose, it’s how can I help my clients in this industry be the best that they can be. But you all take it a step further. And you were the first accounting firm to be certified as a B Corporation in California. So your purpose goes to really being a global citizen as well and impacting the environment and sustainability positively. Talk a little bit about that decision to become a B Corp and how that plays into your values, and that overall goal of being a great citizen, both inside the firm and outside in the community.

Well, it’s a little embarrassing, Jeremy, but it reveals the fact that most of my strategy comes to me after the fact. So it looks like it was strategic. But it turns out, it was opportunistic. I was invited to an event called Cocktails for CSR leaders. So that’s cocktails for corporate and social responsibility leaders in the Bay Area. And we met at Pandora’s headquarters in Oakland. And there were leaders of, you name the tech company, they had their corporate social responsibility leaders in the room. 

And there was one person in the room that was really, really stuck out. And that was the 50 year old in the suit. I was older than everybody by, oh, probably close to 20 years, clearly the only one in a suit, and really, still wondering, how did I get in this room? And we’re going around in a circle, there’s probably 20 people introducing ourselves and talking about our organization. And the person next to me is from Beneficial State Bank, that is a B Corp. And I asked her after the original introductions, and it became more of a conversation, you know, small conversations. I asked her about it, she told me about what B Corps were. I didn’t know what they were, I’d heard of them. But really, you know, a beneficial corporation or a benefit corporation, a B Corp—didn’t understand the distinctions. So she gave me a good primer on it. 

And I came back and I thought, you know, went in the B Lab website, that’s the international nonprofit that certifies B Corps and said, You know, I don’t think we’re very far off from this. And saw that there were a couple of CPA firms in the country, I think, six or seven at the time that were B Corps. And so I went to my marketing director and said, you know, what do you know about B Corp? She said, I don’t know anything about them. I said, Well, this is it. I think we’re close. And that was it. I mean, she said, this is going to be one of my goals for the year. I said, Great, make it your goal. And she did. She took us through the process, it took, I think, oh, nine or 10 months. And she had to sell people internally, because we had to make changes to our governance, we had to make changes to our purchasing, all kinds of things that we needed to do to document and to adopt. In some cases, better behaviors or some cases, document the behaviors that we had. 

And we became, you have to have a score of 80 out of 200. I think we scored like 80.9, I could tell you getting 0.2 points for spending three days redrafting your purchasing policies makes it very difficult to get over that 80 point scale. So we just barely climbed over it in our first certification, I think we’re up to 89 or 90 now. Out of that 200 points, there’s maybe 100 that we’re never going to be eligible for just because of the kind of business we are. So 89 sounds really low but it’s actually not bad for a professional services firm. 

So she started down the process, I started to talk to my partners about it. And, you know, like a lot of things that I bring up, you know, most of them say if he brings it up for another couple months, I’ll pay attention. Otherwise, maybe this is just another one of his wild ideas. As it turns out, you know, we wanted to do it to have a benchmark so that we could continue to try and be better corporate citizens. But Jeremy, the impact it had was, you know, way beyond anything that we anticipated when we’re recruiting on college campuses. You know, it’s like most regional firms or, or non national firms, you wait for the students to get done with the big four, and then you hope they come by your table to talk to you, right, there’s something there that that drew them in. 

Students today understand and demand transparency in businesses that they pursue for a career, and that B Corp banner above our recruiting table has been a beacon. Not only has it helped us attract people from college, but attract experienced hires. And I believe that our retention rates are demonstrably higher. I don’t believe that I know that because I get the information from our HR director. Our retention rates are demonstrably higher, because we are a purpose driven organization. So that’s kind of how it started. Like I said, I wish I could tell you that it was super strategic. It wasn’t. And if it wasn’t for the passion of my marketing director, it might still be something that I’m thinking about, instead of having launched the Sensiba Center for Sustainability last August after about a year and a half’s worth of research. That is, we believe, a big part of the future of our firm, is helping people with SASB standards and other international standards regarding sustainability.

I was gonna say that’s that next step in that iteration is you not only improved your firm, but that purpose now became an opportunity for other leaders within your firm to launch that center. And now they’re helping their clients do it—they’re taking their purpose, their passion, and they’re helping them in ways that’s not probably the most traditional way accounting firms are probably helping their clients. So how did that come about from a leader standpoint? Did somebody inside the firm say, Hey, John, we really need to take this to our client—was that spearheaded from you? What was the genesis of the Sensiba Center for Sustainability?

Well, it’s collaborative, like everything is. You know, I listen to these podcasts that I do sometimes Jeremy and I cringe, because, like I said earlier, my ego is ahead of itself. There’s nothing that happens because of me. There’s things that happen with me, for sure. But in this case, that marketing director that I tapped to lead this effort a few years ago decided that this is going to be it for her. Sustainability was her true passion. She wants to become a partner in the firm. She wants to generate revenue through providing sustainability consulting to other organizations. She wants every, you know, it’s fun to say that we’re the only CPA firm in California that’s a B Corp. Not true, by the way, as of two weeks ago, our friends at Armanino became a B Corp. Another firm that you know very well, that I’m not going to say until they get over the finish line, because that’ll be their story to tell is going to become a B Corp. So we’re very excited about others joining the space. But she decided that was going to be her path. 

So we talked to and one of our test partners, Scott Anderson was an audit partner. Scott’s also a professor at UC Santa Cruz, a campus that can’t get much more California than that it is—very sustainability focused. And Scott said, Well, look, this is super exciting to me. And so two years ago, at our annual partner retreat in May, they proposed a business plan to create this—the Center for Sustainability. And they worked on it for about a year and a half and launched it last August. 

Our marketing director, Jennifer Cantero, is now the Director of sustainability. She’s hiring her replacement on the marketing side. And she’s going to drive the growth in that practice. She already consults with other organizations, CPA firms, and mostly not CPA firms, on B Corp certification, on sustainability practices. And then Scott Anderson is working on the SASB related disclosures that are, it’s still kind of the Wild West in terms of standards, we’ve seen some consolidation in the last six months in standard setting bodies. So I’m very confident that  we will have tighter standards internationally before long, and they’re both really passionate. 

We’ve got others in the firm, younger leaders. I know that’s a topic of your podcast, younger leaders that have stepped up and become officers in the local B Corp, local beehives they have in communities, including here in the Bay Area down in Fresno. It’s very well supported at the partner level, and really well supported at the staff level. And we’ve got great leaders in that center right now, with more coming. So it’s very exciting. And it wasn’t me, it was definitely us that decided that this was something that we were going to be passionate about.

I’m excited to see where that goes, John. I think it’s a very innovative idea. I know that’s kind of a buzzword that’s out there. But it isn’t the traditional type of services you see in an accounting firm, but it really is a testament to two different groups of leaders within your firm, first the partner group to allow someone to bring such a, you know, new out of the box idea up and say, Hey, we’re gonna get behind this and support this. It’s your passion, its purpose, it’s in line with our values. And let’s, you know, learn how to turn that into a business. And then also to the leaders that are leading that effort, you know, to take the initiative and really run with it and say, hey, they’re giving us the support, let’s go in and create what we need. And really, at the end of the day, we’ve been talking about purpose over profit, but they’re not mutually exclusive. You’re focused on your purpose, your focus on your passion, but I’m not gonna ask you to disclose numbers, obviously. But I’m assuming that there’s been profitability to follow.

Correct, right. Without a doubt there, you have to be able to generate capital to continue to invest and to continue to innovate. The fact that they’re not mutually exclusive is, again, something that gives me great hope. Not only is it not mutually exclusive, Jeremy, but it’s becoming an imperative. You will not be an employer of choice if you are not a good actor, and you cannot hide in the age of the internet. There’s glass door and any number of other websites where people are going to expose you. And yeah, and that’s really encouraging. I think our profession is great, as you know, you work with so many CPA firms who are really wonderful people, high integrity, very community minded, this is not a stretch for CPA firms to have this focus. 

And I’m super encouraged because it is no longer—well, how much can we budget for that so that we can greenwash our website and make it look like we’re, you know, doing the right thing. That doesn’t exist anymore. It’s, we’re not going to survive without this. I’m a member of the National Association of Corporate Directors and attend a lot of their education and ESG matters are top of mind for boards as boards address risk. And the risk of not being in business because you’re not ESG focused is a risk that is very much the top of mind for directors across the spectrum in our country and internationally.

Yeah, and for the listeners, ESG? 

Oh, environmental, social and governance.

I appreciate that. Well, John, thank you so much for your time. Do you have time for three more questions?

Sure. As long as they’re not hard, Jeremy.

I don’t think they’ll be too difficult. We’ll try to keep them challenging but not too difficult. What is the one book you believe every leader should read?

I’ll give you two answers to that. Jim Collins, his work is quoted often because it should be, so Good to Great is a wonderful book. And then the second answer is really for leaders of professional services firms. And that’s David Maister’s True Professionalism. And we hand that book out actually, to people on their first day with the firm.

Very good. I’m a huge fan of that book. I’ve probably got more sticky notes sticking out of that book than there, maybe then there are pages in the book. I’ve got three or four on some pages, that’s a good one. 

And then if you’re gonna listen to something, Speed of Trust. It’s Speed of Trust by Stephen, Mr. Covey. It’s less than an hour. And I encourage leaders to listen to that once a year as a group together and talk about it. That’s a really powerful.

Speed of Trust, I will have to look, I’ll have to look that up and listen to it myself. I’ve not actually listened to that. 

Oh you’ll love it. 

I appreciate that. Alright, question number two. In our profession, we often do things because it’s the way we’ve always done it. And that can be a bit of a barrier to change. As leaders, what is one of the ways we’ve always done things you would encourage needs to be changed?

Focusing on the way that we price our services to the market. We’re a cost plus for the most part, believing that somehow our costs translate into value in the marketplace. And it causes all kinds of frustration and unrest in firms, because you believe that the amount of time we put into something equals value to our clients. And that’s, you know, it’s easy, because it’s measurable. We all know, WIP, we all know, realization. We all know write ups and write downs. And we’ve done it that way. And we’ve been incredibly successful. And it breeds all kinds of bad habits and bad results. And I think that we need to stop doing that.

Very good. And question number three, for leaders that are looking to improve in the area of focusing more on purpose over profit, again, not mutually exclusive, but focusing more on that purpose side, what is their best next step, leaving this podcast, what’s their best next step?

To look for like minded people in their community that they can interact with and network with, people that might seem a little out there. So get yourself a little bit uncomfortable, get a local community organizer, somebody that’s talking about, you know, serving the homeless, somebody that’s talking about affordable housing, things that may not have been on your radar screen before, get a little bit uncomfortable. 

And if you don’t already see people as individual humans, stop looking at groups, stop doing what we all do just naturally, because it’s hard to focus on people as an individual human being, it’s easier to categorize people. And we all do it, because it’s just part of our nature. But look at each individual human being, and try and figure out a way that you can impact them. Draw a line between the way that you run your business, the way that your business behaves in your community, and the positive impact it has to people beyond the employees and owners and clients of the organization. Look at all stakeholders and just start exploring the topic, Google it and talk to people like you and others in the profession that are others in business that are on that same journey. It’s fun. 

But I’ll also tell you, Jeremy, that being a California CPA firm, and a B Corp, I belong to organizations that have leaders all over the country. And when we first became a B Corp, you know, was that the kind of the eyeroll—Oh, there’s the California guy. You know, that’s, we expect that from somebody in California now, what are they talking about? So get past that a little bit, too. Be ready to, you know, when you’re doing something different, people are gonna look at you a little differently. Just smile, and if they’re not as far along in the journey as you are, be patient, help them along.

John, I think that’s great wisdom. Thank you so much for your time today. I really appreciate the conversation. And look forward to talking to you again soon.

Anytime, Jeremy. Take care.



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