Ep. 252: Rick Watson - Cultivating Organizational Trust

< Intro >

– Welcome back to Count Me In.

I'm your host, Adam Larson,

and today's episode is
all about company culture.

Our guest, Rick Watson,

CEO of Protection Point Advisors,

founder of the National
Referral Network, and an author,

is a seasoned leader with
a wealth of experiences.

He discusses his journey from
working with a large corporation

to starting his own firm,

and the challenges he
faced along the way.

We explore concepts
like trust compression,

the importance of storytelling, and
edification and empowering a team.

With practical examples
and real-world experiences,

Rick provides valuable strategies,

for creating a purpose-driven,
successful organization.

Get ready to be inspired and motivated,

as we dive into the power
of culture and leadership

in this insightful, engaging,
conversation with Rick Watson.

< Music >

Rick, I'm very excited to have
you on the Count Me In podcast,

and excited to be talking about leadership,
and just some of your journey, as well,

and what you've learned along the way.

And, maybe, we can start off by what
inspired you to start your own firm?

It's not an easy task to do that.

It's not something that
people can do lightly.

How did you assess your readiness
for this entrepreneurial journey?

– It's funny, I, actually,
wanted to be tested.

I wanted to be weighed
and measured, that was true.

And there was a point where I
was working for a corporation,

every year they would adjust my sales
territory, and that drove me nutty.

And, so, I would do well,
and they would restrict it,

if I didn't do as well, they'd increase it.

It was really weird.

They knew what they wanted to pay me.

So I didn't start going down that
road of starting my own firm.

But I was happy to work with somebody
else, I guess, is what I'm trying to say.

I worked with a partner for a long time,
and I liked playing second fiddle

because, then, I didn't have to
have all the attention on me.

I could actually just do the work.

And there was a point where
that partnership fell apart

and I had to step up.

And I really like being in charge today,

I like being the CEO.

But it was a transition that
took a few years to get there.

– I can only imagine the transition,

especially, if you've always
been a company person.

You've always not have
to make all the decisions.

There's a lot of weight that comes

with having to make the top-level
decision, the top-level strategy.

How did you handle
adjusting to that weight?

– Yes, it's funny that you say that.

So I always think of someone will
be talking about their kid's school,

and now their kid just graduated
from whatever, and I'm paying for that.

Well, I know that in the end analysis,

it's our efforts, my decisions, that
make that go badly or go well.

And you're right, it's an absolute
amount of weight all the time.

On the other hand,
I like taking care of people.

And, so, you do that at home,
you take care of your family.

And, yes, I suppose it's more weight,

it's more responsibility,
those people depend on you.

And, so, I just have a really big
family, it seems like, anymore.

– Yes, I like that, seeing them as your
family because it's no longer just numbers

or people who work for you or
say, "Oh, I have this many people."

It's like, "No, that person has a name.

They have a family themselves,

they have a life, as opposed,
to just looking at the bottom line."

– Yes, I think that there is a
management school of thought

that says that's a bad idea, I disagree.

I think that loyalty and culture
is part of a company,

and that you don't have to
turn over people all the time...

I just think that there's a school of
thought that you can turn over people,

and I think that if you don't turn over
people, they're so much more profitable.

It's a good business decision
to hold on to people,

and part of that is to build culture

and relationships with them.

– No, that's great, and when you
mentioned things like loyalty,

it makes me think of trust.

And one of the concepts you mentioned

in your book, A Firm Worth Building,

is trust compression.

And when people hear that,
they're like, "What does that mean?

I don't get it."

Unless they've read your book,
they may not understand it.

So I was thinking maybe you could
talk about what trust compression is,

and how important it is in leadership.

– The trust compression it's kind of funny,

it's something that we bumped into.

It wasn't on purpose.

I think that there should be
a university study about that.

But, effectively, what
happens is that people, humans,

don't make decisions about
how much they trust somebody

based on the length
of their interactions.

It's based on the number of interactions.

And, so, doing those appointments,

we were doing appointments, in my
industry, the typical appointment

goes for 60 to 90 minutes.

You do two of those, an opening
appointment and a closing appointment.

It turns out that if you break that

into four appointments,
at 15 to 20 minutes apiece,

which is way more efficient.

Trust that you'll build in that
relationship is so much more significant.

And, so, what I'm telling businesses

that we work with is that
it's a really good idea.

If you can break your process
up into smaller, bite-sized bits,

the people will remember more,

and your relationship will be older
in a shorter amount of time.

It's pretty cool.

– That does sound pretty cool.

One thing that I tried doing was
setting my default, in Outlook,

to 25 minutes and 50 minutes.

Never doing a full hour
and never doing a half hour.

Because I felt like we would
go up until that time,

gave ourselves no time for break,

but, then, also we'd spend too
much time doing other things.

How do you still get as
so much accomplished

by breaking those meetings up?

How does that, positively,
impact the conversation?

– Each one of those conversations is,

in a sense, scripted,
we know where we're at.

I think that so much of business
conversations are wasted energy.

They do the relating, which we would
call relating, I talk about it in the book.

Which is that first part of like,
"Oh, how was the game?

How was your kids?"

It's bringing down the tension in the room.

We do that, consciously,
but it takes five to 10 minutes,

it does not take whatever.

I see people will do it for an hour,

and they really are slowing
down their conversation.

So we're trying to get from
point A to point B, or waypoints.

So what we effectively do is
break the conversation up into bits.

Where you know what part
you're supposed to get to,

and then it goes pretty easily
when you do it that way.

Because I know that today my job is
to take you from this point to this point,

and as soon as we're there, I'm done.

I'm like, "That's great."

Let's go ahead and schedule.

I think one of the tricks
of this, though, is to schedule

those conversations really close together,

so every couple of days.

So it's weird, again, instead, of the
traditionally, you'd talk to somebody,

spend an hour and a half with them,

and, then, come back and see
them in two weeks or three weeks.

Well, they've forgotten
half of what you've said.

So if you break it into
short little conversations,

and we're going to go,
"I want you to digest that,

and let's just talk in two or three days."

Then in two or three days we'll work
through that and it really works well,

they can build upon that,
and they remember more.

– Yes, that sounds like it.

But what about if you're
facing challenges or setbacks

within your business?

Can you still utilize this
concept of trust compression

to maintain your team morale, and
client confidence, and things like that?

– Yes, I think trust compression,
the way it's supposed to be used

is when you're bringing somebody on
new, who doesn't already trust you.

So where it doesn't get used is a
place where you try to take somebody,

who is an existing relationship,

I have staff who's been
with me for two years.

I'm not doing trust compression with
them, it's already happened, theoretically.

Although I think those little events,

little things to build the
office, to create bonds,

we do ice-cream-for-lunch days.

I think that little things like that, doesn't
cost a lot of money, it's the same idea,

you're building relationship consciously.

I think so many firms don't do that.

But, yes, if you have bad news,
and it takes a long or whatever,

if you have a complicated subject,

you guys might need to
do that in a staff meeting,

where it goes in one
long session, I should say.

One thing I'm thinking about
that we do in our meetings

that I think is really helpful,
is no matter what the subject,

good or bad, we start with a
human element to that conversation.

So we always start out with like, "Let's
spend the first five or 10 minutes,

and tell me about something that's
going on interesting in your life."

The reason is because it brings
the conversation back to human.

Otherwise, sometimes, we see
each other as tools to an end,

and we need to remember that
they're actually people with lives,

and hopes, and all that stuff.

And, so, we'll do things
like thorns and roses.

Give me one wonderful thing
that's happened to you,

30 seconds, something wonderful
that happened to you this week,

something awful that happened.

And we'll go through the room, even
when we have 10 people in the room,

we still do that, right in the beginning.

– Wow, I love that concept of
bringing it back to a human moment.

Because with the way industries are
going, with the way the markets are,

people are really stressed
right now, and they're feeling the pinch.

Companies are downsizing but,
then, you're still having to do

the same amount of work,
and you're feeling that tension.

And allowing that space for people
to feel human, even during the workday,

can improve morale greatly, I would think.

– Yes, well, I think what it does
is build bonds, little bonds.

And it's like Velcro, it's not
one of those that work,

it's all the cumulative effect
of all those little bonds,

and it's something so easy and free to do.

One of the things that I
find in accounting firms,

it's not just accounting, to be honest
with you, it's any small professional firms,

is that they tend to run like little fiefdoms.

They don't spend enough energy

focusing on actually running the
business well, building culture.

Being intentional about how we run

and build the business,
it's sort of more ad hoc.

"I need to get my work done, and you're
a tool for me to get my work done."

And, so, that comes across.

We need to change that dynamic

or else it doesn't work
as well, in the long term,

and it's why those firms stay small.

– Mh-hmm, so maybe we
can dive into that a little bit.

What are some steps you would
take to start changing that dynamic,

if you were in a firm like
that or running a firm?

– So I think the first thing that has
to happen is the person in charge

or the team, however it is,
they have to figure out

where they actually want to go.

How they want to scale
their firm and grow it,

and that starts with a value proposition.

"Are we just a proposition?

Are we just an accounting firm
that does taxes, for example,

or are we doing something
that's meaningful and special?

What do we do that is
our sort of superpower?"

And then you figure that out,

and you almost sell it like a religion
to your staff, they believe in it.

They believe in this mission
that you're creating.

"We do taxes faster than everybody else."

"We do taxes better than everybody else."

You've got to make your thing
so you're not a commodity.

The place I think it's a great place to start
is what do you hate about your industry?

Like, what does it just gripe you
when people do it like that?

Because that's the center
of what you believe in.

And, so, I don't think it's just an act.

I think you sell that religion,
in a sense, to employees

because you believe it down to your core,

and that's a meaningful business

that can grow, and there's no reason
to limit its growth, at that point.

You want to spread the message,
the gospel, so to speak, of your idea,

your concept, your approach.

And, so, you do that, you create
mechanisms to help you scale this idea.

So many accountants,
what they do is they'll say,

and this is what I've heard 100 times,

"Yes, I only want to
grow to a certain point,

I've got to get rid of a
third of my clients this year."

It happens all the time
because they don't want to grow.

Because they see business growth as
an impediment to the freedom in their life,

and the opposite is actually true.

That your life gets more free the
more you scale this purposeful idea.

It's very counterintuitive, but it's a
common problem I see in the industry.

– As we talk about this, it made
me think of sometimes you hear

from the top of an organization,
"We've got this great idea."

Kind of like you're saying,
you're selling it as a religion,

but when you trickle
down to the people doing,

maybe, grunt work, people
doing lower level work.

People, even the middle managers,

trying to help lead the team,

and the bottom line is
very much in their mind,

especially, for KPIs, and those things.

How do you balance this idea
versus the actual work you're doing,

to make it applicable?

– So, first, there's a lot of things,

you keep touching on all
the little chapters of the book.

I will say that who you hire matters.

If they don't believe in your religion,

don't hire them, and I
use the religion softly,

so I'm really talking about your purpose.

They need to buy into your purpose.

And if you have somebody
who doesn't buy into that idea,

it is in your interest to find a way
to let them exit the company.

Which is hard to do, by the way,
because sometimes they're stars.

So that's part of it.

I think, you believing it, really believing it,
not just saying, "We believe something".

Because I think employees are
like children, in the sense that

they can sense when you're lying to them.

When your actions
don't match your deeds.

So assuming that those were in alignment

and you had the right people,

then, I think involving them
in the story; "What's happening?"

"How we're achieving this purpose?"

We do a meeting every other
week that talks about our purpose,

where we're going.

We start with who's human, so
this human sort of aspect of it.

We have people who are remote and
local, and it binds the team together.

And then we talk about how
we're trying to get to our goals,

and I think that's also super important.

There's so much that goes
into this, it's a big question.

– No, it is a big question,

and I know that you could have full
conversations just on that one question,

I just asked.

But it's one of those things that
people are constantly looking at,

and I think a lot of times we have
high-level conversations about things.

But a lot of times people
forget about the people

who are actually doing some
of the work that's harder,

people on the front lines.

A lot of times you forget about the people

on the front lines, doing the work.

And how do you trickle that down to them

to make sure that everybody is in line,

and it's not an easy task ever
to do, like you had mentioned.

– Yes, well, they have to have buy in.

So I think the problem with
running your practice like a fiefdom

is that it's all coming from you down,

and they have very little control.

But when you run it differently,

you run it based on a sense of purpose,

then, it goes the other way.

They'll tell you when
you're outside of tolerance.

You should have a staff person

who should be able to walk

into your office and say, "I don't
like how you treated that person,

and here's why."

And rather than that being a negative,

that's a huge positive, you
had somebody stand up.

I want my people to
tell me when I'm wrong

because it's hard to see what's happening.

I need that feedback loop.

– Yes, it's almost like
you need to have those.

I think there's a book out there
that's about the fierce conversations.

You need to have the openness
to have those fierce conversations.

Where you're not attacking anybody,

you're just saying, "Hey,
I'm keeping you accountable

because we all need
to be kept accountable."

– Yes, I think that pushback is important
and I value that we have it, fortunately.

– That's amazing, and, so, another
concept that I wanted to touch on,

that you talk about in
your book, is edification.

And how do you use edification
to empower your team members?

– So edification can be used in two ways.

It's outside; so other professionals.

How do you introduce
another professional?

If you say, "Hey, I've got a financial advisor
I want to introduce you to" potentialy.

Do you say, "Financial
advisor, here you go."

That's great, you've
just commoditized them.

It'd be like me saying, "Hey, I've got
an accountant I want you to talk to."

"Well, that's great, thank you."

That's a wonderful... No.

Edification would be to say, "Let
me tell you about this accountant."

Tell 'em a story like, "He's such a
great guy, we've known him forever,

and he's just done such
great work with my clients.

His funny, little side note..."

And then you tell a story about him,
like "He's into horseback riding."

Whatever that funny little thing is.

All right, now, that thing is something.

It's not just a generic thing,

it's something, something
for them to attach it to.

When we bought our house, the realtor
said, and it's kind of an odd analogy,

but the realtor said, "It's great
if you can give every house

that we look at a name,

so that we can keep track of
which one we're talking about."

Well, that's all we're doing with people.

Let's tell a little story, or a little name,

or something odd about
that that I can remember.

"He's got a funny little dog."

"Oh, yes, I remember that guy."

All right, so that's one
element of edification.

How do you introduce other
professionals to your clients?

Because if you're not doing that,

you're missing the boat.

What clients want today is teams.

They don't want individuals.

So you want a team?
I can solve six problems.

I can't just do your taxes;

I can do your taxes, your estate
planning, so it's that side of it.

The second element of
edification is edifying your staff.

So if you're complaining about the
fact that you have to do all the work.

The pressure of this business is killing
you, and it's so much work on you,

it's because you're not
edifying the people around you.

You want to not be the
smartest person in the room.

In fact, a great way to say it is,
"Look, I'm an amazing accountant,

but without my team, I'm nothing.

I mean, if you want to get this done
or this done, don't call me, call them

because they're way better at it."

And then tell a little story about them.

One of the stories that I tell, all
the time, it's a stupid little story.

But I'll say, "You know what I think
so cool about when we hire people

is we hire just amazing people.

They work in the best interests of
our clients, not because I told them to,

but because it's who
they are, at their core.

And you could give them a million dollars,

and put it in a suitcase, and give it
to them, come back two years later,

and it would all be there
because that's just who they are."

Well, how excited are you now
to be introduced to a staff person

and them to go, "Great, I've
got this person I'm working with."

So I think that edification
of the people around you,

makes you not the smartest person

in the room, which helps a lot.

– I think it also makes
people appeal to the human,

and we've been talking
about this, human side.

Where if you show kindness to another
person, it automatically disarms them.

And there's that old adage,
"Kill them with kindness."

When you're referring to
somebody who's being mean to you.

But it's also you can just be
kind and show that edification

to people that you meet, and it
automatically lightens the room, as well.

– I think so; one of the biggest problems

that the industry has is trying to
be the smartest person in the room.

And the reason is it's not because you
are the smartest person in the room,

it's because of fear.

"I'm afraid that they're
going to see that I'm not."

So what I do is I puff my chest up

and it's all about client control, they're
afraid of doing this client control.

One of the reasons, another
one of my companies,

which is The National Referral Network,

it makes this little sandbox

where multiple professionals,
of different disciplines,

can play in the same area.

They can work with a
client and not be afraid.

If I'm not teaching
edification to the accountant,

so that they don't try to take away
client control from the financial advisor

or from the attorney, they need
to all be able to share that.

And the way they do is by
lifting each other up, constantly,

and it makes them all
stronger, that's the irony.

It's the opposite of cutting down
your competition in the middle of...

If you cut your competition down, it
makes yourself look weaker, not stronger.

– Mh-hmm, someone
should tell that to the politicians.

But that's a whole 'nother conversation.

I mean, one thing I've always
read, when it comes to leadership,

is you want to bring up the people

who are around you, and bring them
up because then it raises you up.

Because you're helping
empower them to become better,

which makes you better.

Which in turn prepares you
for whatever you have next.

– It's also a way to be able to delegate.

I mean, if I built the people up around me.

Then if I pass you over to somebody else,

they're not going to somebody weaker,
they're going to somebody stronger.

And everybody's going to say, "That's
great, yes, sign me up for that."

Nobody wants the worst end of the deal.

They want the best end of the deal.

So, yes, it works with clients,
it works inside of your staff,

and it works within
professional networks.

– Mh-hmm, so how do you ensure
that this edification is a key part

of your team's interactions.

You've mentioned hiring the right people.

What if you've already have
a bunch of people hired.

Can you teach that to people?

– Absolutely, we teach it constantly.

So one of the things we have, and it's in
the book, about client success manuals,

and employee success manuals.

Most of those manuals,
that people put together,

are legal things to keep
them from getting sued.

"I told you not to do that."

No, and we teach classes, constantly,

on the things that we care
about, so, yes, edification.

You could ask any member on my staff
and they absolutely know what's done.

It's like with parents, again, parent
and child relationship is very similar.

It's what behaviors do you
model and do you reinforce,

so that your kids grow up,
and they end up away,

whatever you wanted them to be,
but you modeled those behaviors,

and then you encouraged
those behaviors in them.

You taught them.

It's the same thing with employees,
and if somebody's not tracking,

get rid of them because it will save you
so much time, and money, and energy.

You don't want poison in the system,

and we purposely are pulling
poison out of the system.

– Do you maybe have any
examples that you can share,

of where your team has been able to
innovate and contribute to the success,

by using the practices
we've been talking about?

– So one of the things that
I can think of is, yes, lots of them.

First of all, one of our mottos in our
company is "We build what should exist".

So we have a financial planning firm,
and a referral firm, and a real estate fund.

And, again, they all operate on this;

"We build what should exist."

We go where the market should exist.

So it's weird because
we don't say we do taxes.

We talk about bigger things.

I think that's the first step
is starting, in that regard.

And, I'm sorry, I lost the
thread of your question there.

– It's okay, I was talking
about any examples you have,

of people applying this and it's
showing success in your organization.

– So because we innovate, people
are always throwing out ideas

as how to get there, and that's
been a pretty strong piece.

I'm trying to think of an example,

a specific example, other
than the fact that we've grown

a financial investment firm
to a half a billion dollars,

from about $20 in my checking.

So I would say that's a pretty good
indication that it seems to work,

and we're recruiting
advisors, right now, like crazy.

So I think that also people
are recognizing that story,

and that value proposition,
and wanting to be part of it.

– Yes, when people recognize it,
they see the value, and then they tell

their friends, "Hey, you want
to do this X, Y, and Z service,

you should check out this company
because this is the experience I have."

And it creates that natural
flow between parties,

and potential clients and potential
people wanting to work for you.

– That sense of purpose
that I was talking about earlier,

I think that's part of what
you're selling in a story.

It's funny because I was
thinking of an advisor

that we were bringing into our firm.

But it wouldn't be that different

from another professional
you're bringing into your firm.

What story do you tell them
that makes you guys different?

And is that going to
suck them into your firm?

Do they really want to be
part of it because of that?

And the extension of
that is just that manual.

Somebody in a meeting, recently,
he doesn't even work for us,

but he's looking at us, and
he was just going on about,

"This is the most amazing firm

I've ever come across, and,
boy, if you can have that."

So we train our ideas for
people who don't work for us,

and it's really a recruiting
mechanism, at the end of the day.

So we want them to get excited.

And, then, you have one of them,

in a meeting, get excited
and start talking about it.

What they do is it creates
enthusiasm in the other people,

who are also considering us.

– Mh-hmm, now, do you think it'd
be beneficial for any professionals,

who are listening to this, they may not be
in the same industry or anything like that.

But they're saying, "I want
to apply these concepts."

How important it is to learn
how to be a better storyteller,

when you're creating these interactions?

– Yes, 100%, so we do
classes on storytelling.

– Oh, okay.
– Yes, I mean,

literally, last week, that
was the class that I did.

I think I had 15 people, on the class,
in a Zoom meeting, on storytelling.

So, yes, storytelling is super important.

It's important for clients
because if you tell a good story,

what happens is it's like a string,
and you can lead somebody,

almost, anywhere as long as they
know where that string is going to lead.

– Yes, exactly.
– So the story

is what does that.

But without the story, the
story is that sense of purpose,

it's not just telling them
what the purpose is.

It's telling them the story of
how that purpose got created,

then they buy into it.

They say, "Stories tell..."

And I can't remember that story-

– That's okay, I've
heard the quote before,

but I can't seem to finish
it either, at the moment.

But I think you got across
what you were trying to say,

it's how important it is.

Because what a story does
is it grabs your attention.

It pulls you in.

I mean, the best books, the best movies,

the best things that you're
listening to, if you're grabbed in.

My dad will sit there, at a bookstore,

and read the first chapter.

If it pulls him in, he's either
putting it on a list or buying it

or getting it from the library, the next day.

It's that same kind of concept
for just interactions with folks.

If you're able to tell the right
story and grab people in.

And, so, like you said, when
somebody's coming onto your team.

If you can tell the right story,
it'll grab them in and have them,

part of the quote-unquote, "Religion"
that we've been talking about.

– And the opposite is also true, so
that's why we were doing this class.

Because I listened to one of
my people tell a story poorly.

And I'm like, "You have so
many extraneous details,

I don't even know where
we're going in this story."

And, so, we needed to back that off
and start getting rid of some of that,

or they'll cut their own
reputation, in their story.

"Well, I'm new to this industry, and
don't really know what I'm doing."

There are ways to phrase that
that would not destroy your story.

But the problem is now you've
got somebody who's just tuned out.

And, so, we talk, in that
case, about mentorship.

Talk about how much you value the
mentor who's teaching you right now,

and how you really
want to be more of that.

Then you're borrowing somebody
else's story, which I think is so crazy,

that you can do that

But we can all think of
ways of phrasing something

that would be more productive.

And then the other thing
is practice your story.

Tell somebody the story
and then get feedback.

Somebody who doesn't
matter in this equation,

and they might go, "Well,
actually, I didn't even know

where you're going with that."

So that's helpful.

– No, it's very helpful, and I think we
could, probably, talk about this for hours.

But I just want to thank you, Rick,
for coming on the podcast, today.

I think it's been a really
great conversation,

and I just really appreciate you sharing
your knowledge, with our audience, today.

– You're welcome, and if
anybody wants to find out more,

they can just go to nrnamerica.com,
that's our National Referral Network.

Which is the way that we connect
with accountants, attorneys,

we've build this little sandbox,

and when you come in there, there's
a little pop up, it talks about the book.

Or you can just find the book on
Amazon at A Firm Worth Building,

and it should pop right up.

– Perfect, and we'll put all
those links in the show notes,

so feel free to look at that.

– Great, thank you.

< Outro >

– 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.

Creators and Guests

Adam Larson
Adam Larson
Producer and co-host of the Count Me In podcast
Richard Watson, CFP
Richard Watson, CFP
CEO of Protection Point Advisors, Financial Strategist Providing Wealth Management, and Author
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