The Third Aspect: Identifying and Reducing Business Waste
Reducing waste is essential for building an efficient, profitable business. Inspired by Toyota's "lean" system, Paul explains the Seven Business Wastes that can drain resources if not managed effectively:
- Defects – Identify where things go wrong and create systems to prevent repeated errors.
- Waiting – Examine delays in workflows, particularly areas where waiting on approvals or documents slows processes.
- Process Inefficiencies – Update outdated processes and streamline unnecessary steps to ensure optimal productivity.
- Over-engineering – Avoid providing more than what’s required, especially if it doesn’t add value for the client.
- Inventory Control – For accountants, this includes managing unbilled work or overdue receivables to avoid unnecessary financial strain.
- Internal Motion – Reduce communication breakdowns, especially in virtual environments, to maintain smooth operations.
- Transport (External Motion) – Address poor communication with clients to avoid misunderstandings and delays.
Tips for Effective Brainstorming
To address these wastes, conduct a brainstorming session with a diverse team. By involving junior and cross-departmental members, you can gain unique insights and create a list of both major and minor issues to tackle. Prioritize large, impactful wastes but also address quick wins to build team morale and momentum.
The Fourth Aspect: Leveraging Intangible Resources
Paul explains that in the 21st century, growth is less about tangible assets (like buildings or equipment) and more about intangibles like technology, brand, data, and client relationships. By capturing and solidifying these intangible resources, businesses can create lasting value without adding significant overhead.
Key Intangible Assets for Accountants
- Brand – Build a brand that clients recognize and trust.
- Data – Use data strategically to improve client services and decision-making.
- Processes and Systems – Create systems that make intangible services, like proactive advisory, more concrete and measurable.
- Client Relationships – Strengthen and formalize client relationships to build loyalty and long-term value.
Pro Tip: Assess whether your business processes and intangibles are secure or if they would “walk out the door” with an employee. Ensure you have systems in place to retain these resources even if key personnel leave.
Conclusion: Key Takeaways for Accountants
By addressing business waste and maximizing intangible resources, accountants can enhance efficiency and create a more valuable advisory service. These steps form the foundation for a forward-looking business model that prioritizes client relationships and long-term growth.
