In today's challenging business landscape, organizations need to adapt, innovate, and maximize efficiency more than ever. In today’s episode of Count Me In, we dives into the heart of support functions within organizations, discussing the current markets in 2023 and the inevitable squeeze that many businesses face. Our Guest Kevin Herring, president and founder of Ascent Management Consulting, discusses how you can leverage expertise within your organization as cuts and reorganizations loom on the horizon. Kevin will unpack the role of accountants, finance, IT, HR, engineering, supply chain, and more in optimizing the resources they have in the organization. Discover how you can shift your mindset, change how you operate, and bring your expertise to bear on critical situations.

Connect with Kevin:
https://ascentmgt.com/
https://www.linkedin.com/in/the90dayturnaround/

Full Episode Transcript:

Adam:            Welcome to another episode of Count Me In. Today's world is filled with uncertainty, and with 2023 looking like a challenging year, organizations are feeling the squeeze. Our guest, today, Kevin Herring, president and founder of Ascent Management Consulting. Brings a wealth of knowledge and expertise to our discussion, on support functions within organizations. 

 

We'll explore how businesses can optimize their existing resources, transform their thinking, and redefine roles to survive and thrive in these turbulent times. It's time to reimagine your organization's potential. So let's dive right into this essential conversation.

 

Kevin, I want to thank you so much for coming on the Count Me In podcast. I'm really excited to have you on. As we talk about support functions within organizations. And as we both know that the markets, in 2023, are not looking great. The futures are not looking great. And it's going to put a squeeze on many organizations. And can we start talking about, within organizations. How you can leverage expertise, within your organization, as cuts and reorganizations are going to have to start coming?

 

Kevin:            Yes, that's a great question. How do we do that? And I think that you're right. Everything that we read, everything that we hear CEOs are saying that they're hunkering down. They're planning for a rough 2023, possibly 2024, and they really have to maximize, maybe, a better way to put it is to optimize the resources that they have in the organization to get through it. And our support functions play a critical role in that. 

 

Every organization has a lot of natural slack in the system. And, sometimes, we don't realize it until we really start to drill down and look at what's working, what's not working, that sort of thing. And what we find is that when you talk to people, when you talk to teams, and ask them, are they contributing everything that they could possibly contribute to the organization? 

 

Not are they working as hard as they can, but are they contributing everything? Do they have capabilities that are not being used? Do they have information, understandings of things that are not being tapped? And the answer is almost always, "Absolutely, yes. I'm doing the best I can with what I have, but I could do so much more for the organization, if they just let me."

 

And people and staff functions play such a critical role. Accountants, finance folks, IT, HR, engineering, supply chain, all those functions can play a huge role in maximizing or optimizing the use of our resources. The people that actually produce the product. The people that actually interface with the customers directly. And one of the ways they can do that is really to take a different look, maybe, than they have, historically, about their role in the organization. 

 

So here are a couple of ways to do that. One is to think, when I go to work each day, how do I see myself? And this is not just a semantic exercise. But do I see myself as an accountant who just happens to work at XYZ manufacturing company, for instance? Or do I see myself as an XYZ business person, who happens to bring accounting expertise to the organization? And it's a different way of thinking about my role, "Why I'm here?"

"What am I supposed to do in this organization?"

 

Am I just supposed to perform a bunch of tasks related to accounting? Or am I actually supposed to do things that, sometimes, might even stretch me a bit outside of my area of expertise. To help the business, overall, to be successful and to look for those opportunities? 

 

And, so, when we do that, we start recognizing that for an organization to get the full use of our expertise. We need to think of ourselves in terms of how can we bring our expertise to bear on the critical situations that the organization is dealing with. The critical issues they're dealing with, "How do I do that?". And that's a consulting role, that's not an activity role. That's not a compliance or regulatory role, that's a consulting role. 

 

That's where we're looking for ways that we can help those who are in the core business. To produce more efficiently, more effectively, to satisfy the customer better. To produce better products, higher quality, optimized, profitability, reducing cycle time, all those sorts of things, delighting the customer. Those are all things that anyone in a support function has the ability to help with. If they think of ways to apply their expertise in solving existing problems, and preparing the organization to handle possible future issues. 

 

So that's a shift in thinking, it's also a change in how we operate. Because now, if I'm a consultant, I need to learn how to be a consultant. I need to learn consulting skills. I need to learn how to identify opportunities, diagnose problems, gather data, assess it, and determine how I can solve that problem. Or determine if maybe I don't have the expertise to solve it. Who might have that expertise, and be willing to source that for those in the core business that are struggling. That's a different role, for a lot of people.

 

Adam:            That is a different role. And it's almost like within your internal organization, your title may be Chief Financial Officer or Chief Staff Accountant. But what you're saying is that your mindset needs to be that of a consultant, to better help the organization. So how do you start changing that mindset so that you can better help?

 

Kevin:            Yes, well, first you have to decide who your client is. And this is a problem for a lot of people. Most people, when you ask them, "Who's your client?" They point to their boss. That's the client or the boss's boss, the CEO or the CFO. That's who they really serve in the organization, and that's not an effective mindset to have.

 

Sure, those people play a critical role, but as bankers, really as bankers. People who provide the assets, the resources, the budgets, the tools and supplies, and things you need to be able to take your expertise and apply it to the core business. They want a return on those assets. So they're going to extend the resources for you to be able to use them in a productive way, for the organization. 

 

And, so, that begs the question — Who is the real client? Well, the places where you can have the biggest impact are in production, or in those who are interfacing with the customer, or closest to the core work. That's really where the biggest impact can be had. 

 

And, so, if we see those folks as the clients, and then we learn to interface differently and we interact with them. We are always in the mode of gathering data, gathering information, and trying to look for opportunities to help them. Quite often, when things get tough, we focus on cost. 

 

We think, "Well, how can we reduce costs?" And it's all about squeezing the bottom line instead of really focusing on profitability, not that they're not related. But, ultimately, how can we invest our time, our existing resources, in a better way to get a better return on our assets?

 

And, so, people with financial expertise go into an organization and, sometimes, it's very easy to see waste, and redundancy, and opportunities to help people work better, more effectively, and make better business decisions. 

 

And one of the classic ways is when accountants and finance people go into an organization, and they start building the business literacy of the people who work there. So that they can make better decisions. Not just the leadership, I mean, that's certainly a place to start. 

 

But once the leadership has the big picture, what about all the people who are executing in the front lines? If they don't have the big picture, they're making mistakes all the time. They're operating in a vacuum, and they're doing the best they can with what they have. 

 

But often they have so little, they make a lot of bad decisions. Or they're not given the resources to be able to act in the moment to solve a problem, and the delays are costing the business a lot of money. So there are lots of opportunities for our support functions to go in and make a huge impact on the business, in the next couple of years.

 

Adam:            Now there's one thing I wanted to touch on a little bit, as you talked about the real internal client. Now that's something that I think a lot of people overlook. As many times we're always thinking, "Oh, how can I please my boss?" And looking at your boss as like the banker. 

 

The person who gives you all the resources you need, is something that I don't think many people speak about. How can leadership help the constituents under them understand, "Hey, I'm not your client. Your client is our customer base is whoever we're looking at." How can they help them get that big picture in their head?

 

Kevin:            Yes, one way they can do that is to simply have the conversation. Sit down and talk, frankly, about what that role is, what that relationship is. As a banker, if I'm extending assets to you to do something for the company. I'm expecting some kind of return on those assets. So there may be some promises that we have about how you're going to use what I give you in the organization. What you're going to do for us. How are you going to help the organization realize a benefit from these assets that I'm extending to you, as the banker? And that's a great conversation to have. 

 

And, sometimes, you're not able to have that conversation until folks go out into the core business and start learning what goes on closer to the customer, and the production areas, and see where some of the opportunities are. And, then, they see how they can apply their expertise more effectively. And, then, they can come back to the banker and say, "I think I understand now what I can do for the organization." 

So when I look at the resources you're giving me. Here's what I need, more or less or whatever, here's what I need to be able to help these people improve their performance." Or whatever it is. So I make a promise, if you extend this amount of money to me to do, for instance, a business literacy program in the business. 

 

I'm confident that we can now help people make better decisions down on the front lines. That will have a profound impact on our ability to produce with higher quality, and lower cycle times, and so on, and that's all going to go to the bottom line. 

 

So what is it that I need? I'll make a commitment to you, to make that much of an improvement if you'll give me the resources to do it. And, likewise, it's the same thing, if I'm meeting with a client. So I've been doing consulting for a lot of years. But I was in house for many years before that.

 

And that's when this new idea developed, and started to have some conversations about what my role was inside the organization to those who we defined as my clients. And I recognized that I need to have conversations with my clients about what I can do for them. And work things out with them so that they give me what I need to be able to help them. 

 

There may be some things I need, some resources. There may be some information, access to data, whatever it is. And if I ask you, as my client, if you'll give me those things, I'll come back with a plan that will help you with your business. So let's work out those arrangements so that we know what I'm promising to you. And what you need to give me for me to fulfill that promise to you. 

 

Adam:            Yes, as I'm thinking about this, employees are going to feel the competitive pressure. As you mentioned, CEOs are feeling the squeeze. They're going to have to tight squeeze. I'm sure we've all read about the beginning of 2023, with what happened at Goldman Sachs. What can employees do, as they need to capitalize on these competitive things and be able to stay on top of things? You've mentioned, a lot of that stuff. But I feel like there's more that they're going to need to capitalize on, as the pressure continues to rise with the market way it is.

 

Kevin:            Absolutely, and part of that is that education. That business literacy process, understanding the big picture. And as a person on the front lines, it's helpful for me to understand what business we're in. What the competitive pressures are. How do we stack up against the competition? And are we a big player, are we a small player? What are our strategic advantages and what are our disadvantages? What do we have to overcome to be better competitors? 

 

I mean, all those things are important, for me, to understand. Because when I do my work each day, hopefully, I'm contributing by looking for ways to improve our competitive position. I'm looking for ways that we can do things more efficiently, more effectively. We can streamline, we can cut out redundancies. We can find a breakthrough in being better able to serve the customer or deliver faster, and that sort of thing. 

 

We need to get our core employees to work on building the business and helping the business prepare for tough times, and to help us to survive in it. And we're not going to do that if we think all the great ideas and all the great work is going to come from the leadership.

It's just not going to happen. We need a strong, cohesive, interdependent, team of people all pulling together and looking for ways to work together to make these things happen. And our leaders, our front line leaders, our support functions, all play a critical role in making that happen. So that people have that orientation, and the orientation of serving each other. 

 

You talked about competing, we're going to be competing in a tough market, we figure, in the next couple of years. Well, if it's going to get tough, where do we want competition to be? Do we want it to be inside the organization or do we want it to be us against other providers of these goods and services? 

 

So let's stop competing internally for resources and let's start finding ways to serve each other. So that we optimize the resources we have and use them to their fullest. So that we're able to better compete, against those who we truly need to be competing against.

 

How many organizations are operating where people are fighting, having turf battles, and fighting over office space, or the copy machine, or the forklift, or whatever it is that we're fighting over. And, sometimes, even undermining each other for our own convenience? I mean, how much does that cost the business? I mean, it's huge, it's absolutely huge. And, so, we have to stop doing that. We have to create a culture of commitment to the success of the whole.

 

Adam:            Mh-hmm, and that's got to be really hard. When certain places there's that fight to get to the top, as opposed to let's help each other get to the top. And, I think, a lot of businesses don't have that atmosphere, but we need to help each other in order to succeed.

 

Kevin:            Right, that helps take all the egos out. And just say, "Look, we all play different roles. We have different sets of responsibilities." But when it comes down to it, we all need to choose accountability for the success of the whole business if we're going to make this work. And if we don't, we're undermining our ability to successfully compete in the near term, for sure, probably, in the long term.

 

Adam:            So when you're looking at creating that cohesive team. I think that word you just used, accountability is the key thing. How do you create that real accountability and what does that look like?

 

Kevin:            Yes, so often we talk about holding people accountable. We say if we need to get better performance, more results, we need to hold people more accountable. We need to get things more into control. And what that, generally, does is it creates an environment of micromanagement and compliance responses from employees. And I like to say it's pretty hard to really hold people accountable, in the sense that we hold them accountable and still enable them to be responsible. Because the minute we start taking charge of something. 

 

We tell somebody, "I can't trust you to get the work done. So I'm going to check up on you. I'm going to follow up with you. I'm going to make sure you get it done." The minute that we do that, we've taken responsibility for it. We've taken it away from the individual. Now they're just a pair of hands doing what we tell them to do. And we've taken away their sense of responsibility and commitment, and they're operating out of a sense of a, need to comply to keep their jobs. 

 

And there's a huge difference in performance between those who are operating just to comply and keep their jobs. Versus those who are, intrinsically, motivated and openly choosing their own accountability to their teams, to their coworkers, to their leaders, and the organization, overall. So it's important for accountability to be shaped the right way. To where we orient people to the big picture. 

 

Here's what we all need to accomplish as a business. Here's how our team fits into that. Here's how our team interfaces with other teams, to help us produce whatever it is we produce or deliver to the customer. 

 

And then inside of our team, let's make sure we're clear about what each person does and how it impacts everybody else on the team. And make some commitments to each other about how we're going to work. So that the team can work effectively, and find ways to improve the way that we get the workout. And then the next phase of that, then, is to take that team and say, "Okay, how do we now help those around us to do what they need to do?"

 

We're interfacing with these other teams in the organization. They have work they need to produce. What can we do to serve them and help them, so that they can do what they need to do? It's the same mentality we have to have with our customers. What am I delivering to my customer? It's satisfying a need. 

 

My customer is trying to do something, they want something. So how do I help them get what they need, that satisfies them by their standard, not by mine. Internally, we have to do the same thing. As employees, working together as teams, interfacing with each other, it has to be the same mentality.

 

Adam:            Yes, it really does. And one thing that I'm thinking about, as we talk about making sure that everybody sees the big picture. A lot of times it's hard to apply the big picture. If, let's say, you're a front line worker and you have a lot of activities you're doing, every single day. It's very hard to understand those activities, as becoming results to help the overall organization. To help the big picture. How do you bridge that gap?

 

Kevin:            I had a group of people I was working with, a finance group, and we were doing this in the organization. Trying to increase individual understanding of the overall business. And I remember the finance manager saying, "Yes, we did this in another company and we decided that everybody, to a certain level, needed to have the big picture. Those who are like janitorial staff and other people, they didn't need to know, they didn't care. They weren't going to have an impact. 

 

And I said, "Wait a minute, you can't pick and choose who is going to make the most impact, in any given moment in time." Everybody makes a contribution and otherwise we wouldn't be paying for it. We're investing in people to do things that help us get done what we need to do for the customer. So everybody needs to understand the big picture, to make the right decisions. 

 

And, so, even if you're looking at the janitor makes decisions about how efficiently they use chemicals, for instance. Or how efficiently they do the work, and what they do to provide the environment such that it's ready for people to work, and perform, and that sort of thing. 

I mean, whatever it is they do they can do it well, and they can have a sense of satisfaction that they're contributing to the whole. Everybody needs to be part of that, you can't exclude people. It's one organization, not a two-tiered system where you have the primary class and the secondary class, that doesn't work.

 

Adam:            Yes, it's hard because our society looks at people that way. And you have to break that down when you get into an organization.

 

Kevin:            Yes. And, so, one of the things that works really well is to bring people together. I always find that when you bring a team together. And you say, "Okay, let's educate each other. Let's talk about what each does in the organization." And a lot of times people say, "Well, that's obvious, we know what each other does." 

 

And I say, "No, everybody take just two or three minutes, highlight, here's what I do for, not the tasks I perform. Here's what I actually do in terms of output for the organization. Here's what I accomplish. Here are the things that get in the way of that the most, that make my job difficult." 

 

And as people understand that the light bulbs start turning on. They go, "Oh, I could probably help you with that." 

 

"I could probably help you with that."

 

And pretty soon they start talking about ways they can serve each other. And if we get them into that mindset in that activity, they start making commitments to each other. About how they're going to help each other in the coming months. And, then, we do follow-up conversations and give each other feedback. 

 

We can start talking about how we're doing, how much better we're doing, and where we still need work. And, then, we can start talking about opportunities to create breakthroughs, as we start looking at the overall systems that we operate in, and identify the ones that are making our work the most difficult. 

 

And we identify where we might be able to streamline something, or reduce steps, or simplify, or whatever. Do things concurrently, instead of doing one, and then waiting for the next, and waiting for the next. There are a lot of things that we can do. Once we get people having the education, it's called the business education, to understand the work that they're in and how it matters. 

 

I use the example a lot, in sports, you look at sports players, football, for instance, since we're in Super Bowl season. Everybody, on a sports team, is well aware of the competition and their competitive position. The advantages and disadvantages each team has. Their strengths and weaknesses. They know every player. There are statistics all over the place, about what people are good at and what they're not so good at. And they use that information to create a game plan to defeat the other team. 

 

And, then, during the game, there are all kinds of indicators that tell us how we're doing. So that we can make adjustments and look for ways to create a breakthrough in the game, if we're behind or struggling. And we don't do that very well in business.

 

But Sports is a business, just as much as any other organization, for-profit organization. We're all in it to make money and be able to meet the needs of the customer. So that we have the ability to remain viable in the marketplace. 

 

So if we apply those same principles at work. We find that we need to educate people about the game plan. We need to help them understand what the competition is. What's at stake each day, each month, each quarter, and what are the things that we need to accomplish. And then how are we, at a tactical level, going to contribute so that we can succeed?

 

Adam:            Yes.

 

Kevin:            Those are important conversations to have, and they're not often had in organizations. Especially traditional organizations, where at the top of the organization pyramid; all the knowledge, all the understanding of the big picture, the departments. How the systems, in the organization, work together to produce the product, and satisfy the customer, all those kinds of things. The authority to make decisions. They all tend to reside at the top, and then get delegated to lesser and lesser degrees down through the organization. 

 

So by the time you get to the people on the front lines, doing the work. Who have information, by the way, that nobody else has because they're doing the core work. They're interfacing with the customer. And they have to make decisions in the moment, all the time, that have a huge impact on the business. And, yet, they're the least knowledgeable about the overall organization, the impact their decisions are having. 

 

And, so, they have to make those decisions in a vacuum. And, quite often, they don't have permission to make a lot of decisions. And, so, the decisions don't get made at all. So that's by default, whatever happens, happens. Or there are huge delays while they try to get permission to do something. Or they feed information up the line, and hope somebody somewhere does something about it. That's costing businesses an incredible amount of money. Which is why when we work with people, they're astounded when they get a 50% improvement in performance from a team. 

 

How is that possible? Is it because there's so much slack in the system and you just don't see. But when you find that people are working differently, more effectively together, the results are astounding.

 

Adam:            Yes, that is so true. So this has been a wonderful conversation, Kevin, and I just wanted to ask one last question. In light of the squeeze that is coming with the market, and restructuring of organizations that are coming. What advice would you give to somebody on the other side of a restructuring? And you're still at the organization, and suddenly you have the responsibility of three people now because two other people were let go. What advice would you give to that person, as you're trying to look in things, in the aftermath of that.

 

Kevin:            Well, the first thing I would do is I'd pull my team together and I'd say, "Okay, let's regroup. We've all been through a lot. There's a lot of emotion that we're experiencing. Loss of teammates, increased workload, increased expectations. It's a tough spot to be in." And to be authentic about it, not to paint a rosy picture of everything, and spin the message, and pretend like everything is great. And nobody has experienced anything challenging, recently. 

 

But to be authentic about it and say, "Look, we've gone through some tough times. That's a lot of turmoil to deal with. And I know that you're, probably, feeling a lot like I am about it. You have an empty feeling, maybe, about the people who are gone. You feel concerned for them. You have a little bit of anxiety about our own future, and how things are going to work out for us. 

 

This is all natural, and I'm not immune from it any more than you are. I mean, we all have to deal with those things. And the reality is we have to figure out how to make things work going forward, so this doesn't happen again. 

 

We need to really figure out how we can produce, at a higher level. And not, necessarily, pushing ourselves to work crazy fast or ridiculous numbers of hours. But we have to think smart, so let's pull together. 

 

Let's analyze the work that we do. Let's look at the processes and the systems that we're dealing with. Let's map some of those and let's identify what kinds of things are getting in the way, and let's see if we can't tackle those and create a breakthrough. Either in profitability cycle time, customer response, or quality of product or service. Let's go through and figure out where we can create a breakthrough in the work that we do. So that we can have a positive contribution to the business, to help us be more competitive. 

 

Because the marketplace is unforgiving and they've just spanked us, and we don't want that to happen again. We want to be competitors in that marketplace. And if we're smart about it, this is an asset that we have that we can leverage, is our way of working together that can push us ahead of our competition. And we can, actually, maybe benefit from this difficulty because maybe we can pull ahead of them. Because we've done some smart things in the face of these challenges." That's what I do. 

 

I think people need to just pull together and face the reality of what's happened, and the challenges associated with it, and all that it does to us internally. And to say, "Okay, what are we going to choose to do now going forward?" And that's what a leader does.

 

A leader says, "Look, I'm no different than you. I'm not going to be phony about it. I'm going to tell the truth; this is stressful for me. And I'm going to choose to do the best I can for us to be competitive. And I'm inviting you to work with me for us to all to work together, and do this as a team."

 

Adam:            Yes, I agree. And I think a lot of people are going to need to hear that, as we go forward. Thank you so much, Kevin, for coming on the podcast today. Really appreciate you sharing your expertise with us.

 

Kevin:            Thanks for having me.

Announcer:    This has been Count Me In. IMA's podcast, providing you with the latest perspectives of thought leaders from the accounting and finance profession. If you like what you heard and you'd like to be counted in, for more relevant accounting and finance education, visit IMA's website at www.imanet.org.